Data shows that the cryptocurrency sector as a whole has seen a large number of liquidations following the volatility that Bitcoin and other cryptocurrencies have gone through.
Bitcoin rebounds back above $63,000 level
Following the news of interest rate cuts by the US Federal Reserve, Bitcoin reacted positively and its price surpassed the $63,000 level.
The chart below shows what the asset’s recent performance has looked like.
The chart shows that after this 5% jump in the last 24 hours, the cryptocurrency is not far from reaching the highest level seen in August.
As is usually the case, the rest of the digital asset sector also saw a surge following Bitcoin’s latest rally. Some altcoins, such as Solana (SOL) and Avalanche (AVAX), even managed to significantly outperform the number one coin.
The consequence of all the instability in the market was that there was some chaos in the derivatives market.
The cryptocurrency derivatives market recorded $201 million in liquidations today.
According to CoinGlass, there have been a large number of liquidations in the cryptocurrency derivatives market over the past 24 hours. “Liquidation” here refers to the forced closure that any open contract undergoes after accumulating a certain percentage of losses.
Here is a table showing data on liquidations in the sector for the last day:
As shown above, the cryptocurrency market as a whole saw over $201 million liquidated in the last 24 hours. Of this, approximately US$147 million was for short contracts.
This means that short investors accounted for nearly three-quarters of all liquidations. This is natural since Bitcoin and other assets have risen significantly during this period.
A mass liquidation such as today is commonly known as a “squeeze.” Since the latest squeeze was primarily short-squeezed, it could be called a short squeeze.
Events like these are not particularly rare in cryptocurrency, as most coins can be volatile and speculation tends to be quite active. Given the fact that many speculators are not afraid to use leverage, large liquidations can easily occur.
As for what the latest compression looked like relative to the contribution of individual characters, the heat map below shows it.
As usual, Bitcoin topped the charts with $78 million in liquidations, more than double Ethereum’s $36 million in second place. Solana witnessed the majority of the remaining liquidations, amounting to $11 million.
