In the last few days, crypto markets have been fluctuating. Over 124 0003 traders witnessed more than $421 millions liquidatedIn a 24 hour period, prices plunged dramatically throughout yesterday and today.
New lows are being reached in the crypto market, which has not been seen since November. Bitcoin (BTC), closely followed by Ethereum (ETH), accounted for the largest losses with a loss total of $421 millions.
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Figure. CryptoTraders Liquidations
Binance and FTX were most commonly affected by these liquidations. Bitcoin traders suffered losses of 4,340 BTC and 50,180 ETH respectively. Ethereum traders also lost $121.81million. LUNA traders were hit with losses of 264,350 coins.
The losses of other major cryptos were much lower. Futures tracking Tron’s TRX saw $8 million in losses, followed by Solana’s SOL at $7.54 million. Dogecoin’s DOGE showed $7.24 million while Stepn’s GMT losses reached $6.93 million. Appcoin, at $5.95 millions, was the next alternative currency to lose. Ripple’s futures suffered a $6.1-million loss, while Appcoin’s GMT losses reached $6.93 million.
Figures for 12 hours of liquidation show losses of $286 millions from all major cryptocurrency platforms.
Coinglass data indicates that traders have lost 77.5% of the liquidation sum betting on longs. This amounts to $327 million. Okex liquidations accounted for $129 million, while FTX traders lost $107 millions. The third-place Binance trader is losing $94 Million in liquidations.
In case anyone isn’t aware of what futures “liquidations” are, it’s best to take a brief look at the workings of margin trading.
When an exchange closes a leveraged position, it’s called a liquidation. This happens when there is a partial or total loss of the trader’s initial margin. Most liquidations occur in futures trading. Futures trading tracks only asset prices and not spot trading which has traders actually owning the assets.
Relationship between Crypto Markets
We can see a significant drop in cryptocurrency prices since November 2021. All cryptocurrencies have lost almost half their value. The total cryptocurrency market capital was $2.79 trillion in November 2021. According to Tradingview it now stands at $1.49 Trillion. In November 2021, the Bitcoin market cap surpassed $1.26 Trillion. That’s about 45%.
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Although it’s not clear what caused this sell-off in the first place, it occurs during a market downturn that affects all markets including cryptocurrency.
This indicates that the cryptocurrency market is becoming more comparable to other markets. The S&P 500 and other big tech firms have been more strongly related to crypto in the past year. The crypto market has a stronger connection to the global economic system.
Pixabay's featured image, and tradingview.com's chart.