Tuesday, October 3, 2023

Cryptocurrency traders suffered $1 billion of losses in liquidations over the past 24 hours, according to Coinglass data, the most in 14 months, during a sell-off Thursday in digital-asset markets.

Bitcoin, the largest and original cryptocurrency, tumbled 7% to about $26,900, touching a two-month low earlier in the day close to $25,000.

Some $821 million of long positions – traders who bet on prices to rise – were wiped out during the rush to the exits, CoinGlass shows. Bitcoin (BTC) traders took the brunt of the losses, enduring $472 million of long liquidations, followed by ether (ETH) with $302 million.

This was the largest level of BTC liquidations for a single day since June 2022, Coinalyze data shows, around the time when the leading crypto’s price plummeted to $17,000.

Liquidations in the last 24 hours (Coinglass)
Liquidations in the last 24 hours (Coinglass)

The liquidations occurred as crypto prices fell through the floor during Thursday afternoon U.S. hours turning this month’s slow downtrend into a bloodbath amid financial markets jitters with crumbling foreign currencies, Chinese economic worries and bond yields ripping to multi-year highs. Crypto majors such as BTC and ETH saw near double-digit losses, falling to lowest since early summer.

Read more: Bitcoin Plunges 9%, Sank Below $25K on Binance as August Turns Very Ugly

Liquidations happen when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial money down or “margin” – if the trader fails to meet the margin requirements or doesn’t have enough funds to keep the trade open. When asset prices nosedive, the dynamic can kickstart a cascade of liquidations, exacerbating losses and price declines.

Edited by Bradley Keoun.

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