Over $1 billion worth of liquidations were recorded in crypto-tracked futures in the last day as the market sell-off intensified on Sunday. A stronger Japanese yen and speculations that market leader Jump Trading was closing its cryptocurrency division served as the catalysts for the carnage.
According to data, Ether (ETH) monitored futures reported over $340 million in liquidated bets, with losses leading at $420 million for bitcoin futures. Futures that tracked Solana’s SOL, dogecoin (DOGE), xrp (XRP), and pepe (PEPE) assumed cumulative liquidations of $75 million.
The greatest single liquidation order was placed on the cryptocurrency exchange Huobi, involving a $27 million BTC/USD trade. More than 275,000 individual traders were liquidated. 87% of all impacted traders, or those who gambled on rising prices, were long traders, according to the statistics.
The liquidations coincided with a more than 11% decline in bitcoin (BTC) over the previous day, and a 25% decline in ether before a small recovery. The most significant one-day decline in ETH values since May 2021, when prices plummeted from almost $3,500 to $1,700.
The well-known cryptocurrency fear and greed sentiment indicator flashed “fear” as a result of the decline, dropping to its lowest point since early July. The indicator uses price, volatility, and social media data to determine whether users are scared, which typically indicates local bottoms, or greedy, which indicates market tops.
When an exchange forcibly cancels a trader’s leveraged position because the trader has lost all or part of their initial margin, this is known as a liquidation. It occurs when a trader does not have sufficient cash to maintain an open position, or when they are unable to match the margin requirements for a leveraged position.
Amidst geopolitical tensions in the Middle East and subpar earnings reports from technology companies, cryptocurrency prices began to decline last week. These elements caused investors to become less excited about artificial intelligence (AI) and to steer clear of riskier investments.
Due to increased anticipation of more rate hikes by the Bank of Japan and the unwinding of carry trades, the yen jumped to seven-month highs early on Monday, exacerbating the decline. The largest decline since 2011 was experienced by Tokyo’s Topix 100 index.
