Data shows the cryptocurrency derivatives market has seen liquidations amounting to a staggering $1.7 billion as Bitcoin and other assets have plunged.
### Bitcoin Erases Recent Recovery with Drop Below $113,000
Last week, optimism was building for Bitcoin as its price approached the $118,000 level. However, by the end of the week, the momentum reversed, leading to a significant setback for the coin. The new week has only accelerated the decline, with Bitcoin opening Monday with a sharp drop to the low $112,000 range.
The chart below illustrates Bitcoin’s recent performance, highlighting the bearish momentum that has dominated the market.
### Broader Market Impact: Altcoins Also Plunge
Bitcoin’s decline has not been isolated. Ethereum (ETH) and other altcoins have also suffered heavy losses over the past day, with most seeing larger percentage drops than BTC. Among the top cryptocurrencies, Dogecoin (DOGE) and Chainlink (LINK) have endured the largest declines at 10.5% and 9%, respectively.
As is often the case during high market volatility, chaos has spilled over into derivatives exchanges.
### Crypto Market Liquidations Near $1.7 Billion
According to data from CoinGlass, the cryptocurrency derivatives market has experienced an extraordinary wave of liquidations in the past 24 hours. Liquidation refers to the forced closure of any open contract after it accumulates losses beyond a platform’s specified threshold.
With the recent price action predominantly downward, most losses and liquidations have affected bullish positions. Indeed, as the data shows, long contracts have borne the brunt of the liquidations.
Out of $1.7 billion in liquidations during this period, approximately $1.59 billion involved long positions, while only around 5% (~$83 million) affected short positions.
### Ethereum Leads in Liquidation Volume
When breaking down the liquidations by individual cryptocurrencies, Ethereum accounts for the largest share with $496 million liquidated. This dominance likely reflects both its sharper price decline of 7% and increased speculative attention in recent times.
Solana (SOL) ranks third, with liquidations reaching about $95 million. Despite XRP having a larger market capitalization than Solana, it trails with $78 million in liquidations. Dogecoin rounds out the top five with $61 million liquidated.
### Market Volatility and Leverage Fuel Liquidation Events
Massive liquidation events are not uncommon in the cryptocurrency sector due to the inherent volatility of digital assets and the easy accessibility of leverage trading. However, even by the market’s standards, this latest wave of liquidations stands out for its scale.
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*Featured image from Dall-E, CoinGlass.com; chart sourced from TradingView.com.*
https://bitcoinist.com/crypto-liquidations-billion-bitcoin-crashes-113000/
