Crypto Market Explodes: $372 Million Wiped Out in 24 Hours

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Over the past day, a total of $372 million worth of cryptocurrencies has been forcedly sold due to market conditions. Data from CoinGlass suggests this figure. It appears that most of these liquidations were short position traders who predicted incorrectly on price movement.

Across the wider cryptocurrency market, there was a surge in prices as Bitcoin (BTC) momentarily broke through the $100,000 barrier.

Bitcoin leads liquidation spike

The surge of Bitcoin beyond the $100,000 barrier sparked a rally among alternative cryptocurrencies, resulting in a noticeable uptick in market prices.

Just as anticipated, it was primarily short-position Bitcoin traders who faced the brunt of the liquidation events.

Approximately $70.57 million in assets were sold off entirely (liquidated), and over half of this amount, about $40.37 million, was due to short-position traders. In the last 24 hours, short-positions accounted for $40.37 million in liquidations, while long traders contributed around $30.20 million.

Significant liquidations also occurred on Ethereum (ETH) and Ripple (XRP), amounting to approximately $69 million for ETH and $42.50 million for XRP. Similar to Bitcoin, more short-position liquidations were seen on Ethereum compared to long positions, with a total of $35.21 million in short positions versus $33.79 million in long positions.

Large amounts of cryptocurrencies (ETH and XRP) were sold off, totaling around $69 million for ETH and $42.50 million for XRP. More people closed their short positions (betting on a price drop) than their long positions (betting on a price rise) on Ethereum, with the difference being about $1.42 million in favor of short positions.

In a similar pattern to those who were shorting (betting that the price would decrease), Ripple saw approximately $27 million worth of positions being closed. Conversely, traders who were long (betting that the price would increase) had to close about $15.50 million out of the total liquidation of $42.50 million.

Market volatility catches traders off-guard

It’s been observed that the significant reduction in the number of short-position traders could be due to Bitcoin’s price fluctuations over the past week. Interestingly, these traders were anticipating Bitcoin to hover around the $92,000 to $95,000 range.

Consequently, Bitcoin’s sudden increase beyond $100,000 took several traders by surprise because they thought its volatile pattern would persist. Nevertheless, fresh predictions suggest that Bitcoin could reach $249,000 in the remaining part of 2021.

Over the past week, both Ethereum (ETH) and Ripple (XRP) experienced a similar, prolonged period of price consistency. Contrary to expectations, though, the market’s general recovery occurred earlier than anticipated, affecting most assets.

Analysts closely monitor market patterns to determine how much longer the optimistic phase might persist. This could indicate an upcoming sequence of upward trends, especially with the U.S. set to inaugurate a new government on January 20th.

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2025-01-16 18:52