Data shows the cryptocurrency derivatives market has suffered significant liquidations following the bearish action Bitcoin and others have seen.
Bitcoin Has Retraced Some Of Its Recent Recovery Over The Last 24 Hours
Bitcoin has opened the new week with a shock as the asset’s price has come down to the $63,800 level after having recovered above $66,000 earlier. The below chart shows how the coin’s recent trajectory has been like.
Looks like the price of the coin has seen a notable drop over the past day | Source: BTCUSDT on TradingView
As is usually the case, the rest of the cryptocurrency sector has also followed the original digital asset in this plunge. What’s different, however, is that BTC’s 3% losses over the past day are actually deeper than what many other top coins have witnessed.
Nonetheless, the overall volatility in the market has still been significant, which can be seen by what has gone down over on the derivatives side of the sector.
Crypto Derivatives Has Just Witnessed A Mass Liquidation Event
According to data from CoinGlass, the cryptocurrency derivatives market has observed a large amount of liquidations over the past day. “Liquidation” here naturally refers to the forceful closure that any contract undergoes by its platform after it has amassed losses of a certain degree.
Below is a table that shows the relevant data related to the latest market liquidations:
The liquidations seem to have been long-heavy | Source: CoinGlass
It would appear that the sector has seen almost $180 million in contracts go down the drain over the last 24 hours. Out of these, $133 million of the contracts were long positions, representing 74% of the total.
Many investors had been optimistic about the market at the end of last week, so it’s not surprising that speculators had got bullish positions set up, betting on the run to continue into this new week. Unfortunately for them, it didn’t work out.
In terms of the contribution to the flush by the individual symbols, Bitcoin has held the top spot like usual with $38 million in liquidations.
The distribution of the liquidations across the various symbols | Source: CoinGlass
BTC’s contribution, however, isn’t much when compared to the total market liquidations, so it would appear that altcoins across the board have been seeing some heavy speculation recently.
Mass liquidation events like this latest one aren’t something particularly rare in the cryptocurrency sector, due to the generally high volatility that the various coins witness. Leveraged speculation is also abundant, with many traders willing to go for large amounts of leverage.
It would seem that the mass liquidation event of the last 24 hours hasn’t been able to dissuade these speculators, as the Bitcoin Futures Open Interest, a measure of the total amount of futures positions currently open on all derivatives exchanges, is still at notable levels.
The trend in the BTC Open interest over the last few months | Source: CoinGlass