In Monday’s trading session, crypto futures traders lost over $500 million in liquidation positions as severe volatility impacted highly leveraged long and short positions, with some major exchanges plunging as much as 12%.
Data shows that Bitcoin (BTC) plunged from $43,000 to as low as $40,300, leading to declines in major tokens such as Chainlink (LINK), Cardano’s ADA and Solana’s SOL, which fell over 8% before recovered slightly.
Generally riskier bets Shiba Inu (SHIB) and Dogecoin (DOGE), two dog-themed meme tokens, performed slightly better with a 5% decline. Meanwhile, BNB Chain’s BNB, Avalanche’s AVAX and Celestia’s TIA showed strength with gains of up to 20%, undeterred by Bitcoin’s weakness.
Nearly $475 million of long positions, or higher price bets, and $73 million of short positions, or higher price bets, posted losses, while leveraged bets were generally unwound as high funding rates set the stage for an unstable market Create market environment.
Data shows that the most liquidations occurred on OKX with $190 million, followed by Binance with $148 million and Huobi with almost $60 million.
The largest single liquidation order occurred on Bitmex, a Chainlink (LINK) futures position worth over $33 million.
Liquidations occur when an exchange forcibly closes a trader’s leveraged position due to a partial or complete loss of the trader’s original margin. This happens when a trader cannot meet the margin requirements for a leveraged position, that is, when he does not have sufficient funds to keep the trade open.
Meanwhile, some market observers told CoinDesk that Bitcoin’s recent rally was supported by strong fundamentals – one that catapults it into an “unprecedented” era.
“Momentum in the Bitcoin builder space has been steadily increasing throughout the year and we are now seeing markets reflect the excitement over the increased activity,” Muneed Ali, founder of Bitcoin development firm Trust Machines, said in an email. Email CoinDesk with. “There are reasons to be optimistic about the Bitcoin ecosystem due to the rise of Ordinals and Bitcoin L2s. We are entering an era of Bitcoin that we have never seen before.
“I expect interest in Bitcoin to increase sharply in 2024 with possible ETF approvals, the halving and the influx of new developers,” Ali added.
Originally posted 2023-12-12 03:38:38.