Data shows the cryptocurrency derivatives market has been hit with nearly $1.4 billion in liquidations as Bitcoin and altcoins have crashed.
The first week of November has kicked off on a bearish note for the cryptocurrency sector as Bitcoin and other digital assets have plummeted. BTC is down to $103,800 for the first time since its brief dip in mid-October, sitting on a weekly loss of more than 9%.
Before the October retest, the last time Bitcoin was at the mark was all the way back in June. Thus, if the cryptocurrency persists at these levels in the coming days, it would have observed a multi-month reset.
Ethereum is in a similar position, dropping to $3,480, the lowest since the start of August. ETH’s weekly return is even worse, standing at a negative 15%. Other assets in the space have generally witnessed a similar or worse decline, underscoring the intensity of the selloff. Naturally, all this volatility has also resulted in chaos for futures market traders.
As prices across the sector have plunged in the last 24 hours, it’s no surprise to see that the vast majority of the liquidations involved the bullish bets.
From the table, it’s apparent that $1.22 billion in liquidations were related to the long positions, equivalent to 89% of the total. This is a significant amount and suggests speculators were hoping for a rebound in prices, so they were ready with leveraged positions, but clearly, the trend didn’t work out in their favor.
In terms of the individual assets, Bitcoin and Ethereum saw the most liquidations at $404 million and $355 million, respectively.
In the cryptocurrency sector, a futures squeeze isn’t exactly a rare event, owing to the volatility that coins tend to see on the regular and the fact that overleveraged positions are often in abundance. Exceptionally large liquidation events like this latest one, though, are indeed uncommon events.
