Crypto Market Faces Severe Liquidations Amid Recent Volatility
The cryptocurrency derivatives market has been hit hard once again, with a significant wave of liquidations impacting Bitcoin and other digital assets. This turbulence has been caused by a sudden downturn, putting a spotlight on the vulnerability of leveraged positions.
Massive Liquidations Hit the Crypto Sector
In a dramatic turn of events, the crypto market experienced an enormous $700 million worth of liquidations. Bitcoin, along with other cryptocurrencies, witnessed a sharp decline on Friday, prompting a record-breaking number of contract shutdowns in the futures market. Liquidations occur when contracts incur substantial losses, forcing platforms to automatically close them.
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Bitcoin’s Unprecedented Futures Market Impact
Last week’s market turbulence left many positions unprepared, with Bitcoin alone suffering liquidations exceeding $11 billion, according to Glassnode’s data. This marked the most significant drop in Bitcoin futures Open Interest ever recorded, resetting speculative activity across the derivatives market.
The Open Interest, representing the total USD value of all active Bitcoin-related positions on centralized exchanges, experienced a dramatic plunge. Glassnode’s heatmap vividly illustrated the intensity of this shift among the top 100 cryptocurrencies by market capitalization.
Continued Market Volatility and Liquidations
Despite a recent market squeeze, traders found themselves vulnerable once more as volatility persisted, leading to a fresh round of liquidations across multiple platforms. CoinGlass reported nearly $708 million in liquidations within the last 24 hours in the derivatives market.
Approximately $457 million, or 64%, of these liquidations involved long positions. The decline in Bitcoin and other cryptocurrencies triggered this flush, explaining why bullish contracts were primarily affected. Although smaller than last week’s event, this wave of liquidations was still significant due to prior leverage resets and less severe volatility.
Ethereum Leads Liquidation Figures
Ethereum accounted for the largest share of liquidations, with contracts worth over $234 million affected. Bitcoin followed closely with $168 million, and Solana contributed $42 million. Such widespread liquidation events underscore the inherent volatility of the crypto market, where significant leverage is easily accessible.
Current Bitcoin Price Trends
As of now, Bitcoin is trading around $113,300, reflecting a decline of approximately 6.5% over the past week. The cryptocurrency continues to struggle with recovery following the recent market crash.
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