Bitcoin News Today: Leveraged Longs Wiped Out as BTC Plunge Triggers $904M in Liquidations

In the past 24 hours, crypto derivatives trading platforms reported total liquidations of $904 million, with over 206,000 accounts being liquidated, reflecting the heightened volatility and leveraged exposure in the market. This marked a sharp increase from the $806 million liquidations previously reported, underscoring the rapid swings in digital asset prices. The majority of liquidations were concentrated in Bitcoin and Ethereum, two of the largest cryptocurrencies by market capitalization.

Bitcoin experienced a sudden drop in price, falling below $111,000 following a large offload of 24,000 BTC by a whale, which pushed the price down by nearly 2% within hours. The selloff wiped out $267.85 million in long positions and triggered a cascade of margin calls. Ethereum, though also down 2.5%, showed relatively more stability at $4,707. The market was particularly sensitive to leveraged long positions, with 78% of liquidated capital coming from long bets. Bybit, Binance, and OKX were the platforms most affected, collectively accounting for over 75% of the total liquidation volume. The largest single liquidation recorded on OKX amounted to $12.49 million.

Market analysts suggest that the sharp correction in Bitcoin may create a clearing mechanism for leveraged exposure, potentially allowing for a more stable rebound. Some experts, including Jeff Mei of BTSE and Augustine Fan of SignalPlus, believe Ethereum could outperform Bitcoin in a broader market upswing, particularly in anticipation of the U.S. Federal Reserve’s expected rate cut. Ethereum’s smaller market cap and growing institutional interest, including treasury allocations and tokenization initiatives, are cited as factors that could amplify its upside potential. Samir Kerbage of Hashdex noted that Ethereum’s new all-time high signifies growing demand beyond the traditional dominance of Bitcoin.

The liquidation event also highlighted the concentration of speculative trading in Bitcoin and Ethereum. These two assets accounted for over two-thirds of all forced closures, with altcoins like Solana and Dogecoin experiencing smaller, albeit noticeable, liquidation volumes. The liquidation heatmap revealed that long positions were most vulnerable, especially when prices dipped below key psychological levels. The data further indicated structural imbalances in leveraged exposure, as traders had positioned themselves heavily in bullish bets prior to the price correction.

As exchanges continue to manage the risk of leveraged trading, the liquidation events serve as a reminder of the fragility of leveraged positions in the crypto market. Analysts caution that while a flush of long liquidations may provide a short-term reset for the market, the broader implications depend on macroeconomic developments and liquidity conditions. For now, the market remains in a state of flux, with both Bitcoin and Ethereum navigating a delicate balance between volatility and potential for further institutional adoption.

Source:

[1] Bitcoin Flash Crash Triggers $550M in Sunday Liquidations (https://finance.yahoo.com/news/bitcoin-flash-crash-triggers-550m-065050374.html)

[2] $642M in longs wiped out as Bitcoin drops to lowest price (https://cryptoslate.com/insights/642m-in-longs-wiped-out-as-btc-and-eth-lose-ground/)

[3] Новости про Tether (USDT) на сегодня (https://crypto.ru/novosty-usdt/)