Crypto Bloodbath: $1.2B Wiped Out in 24 Hours

Crypto markets experienced a significant downturn over the past 24 hours, with bullish bets incurring at least $1.2 billion in losses. The sell-off, which began on Monday, intensified during Asian trading hours on Tuesday, driving Bitcoin (BTC) below $89,000, its lowest level since mid-November.

Crypto exchanges reported only one liquidation per second, indicating that the overall losses were much higher than the recorded $1.35 billion across long and short trades. Futures tracking Bitcoin registered over $530 million in liquidations, while Ether (ETH) bets saw over $294 million wiped out. Solana (SOL) futures lost $112 million as the token slumped more than 15%, and a 14% dive in XRP and Doge (DOGE) led to over $80 million in cumulative losses.

Liquidations occur when an exchange forcefully closes a trader's leveraged position due to a partial or total loss of the trader's initial margin. This happens when a trader cannot meet the margin requirements for a leveraged position, meaning they don't have enough funds to keep the trade open.

Crypto exchange Bybit, which recently recovered from a $1.4 billion hack, led liquidation figures with over $600 million lost on the exchange. Binance followed with $300 million, and OKX with $147 million. Nasdaq futures pointed to continued losses in technology stocks and strength in the Japanese yen, sparking fears of an August-like risk aversion.

Investors tend to flock to the yen during economic uncertainty or market stress, as it is seen as a safe haven, much like the U.S. dollar or gold. This risk-off sentiment usually pressures riskier assets, such as Bitcoin or equities, as investors pull money out of speculative investments and park it in safer bets.