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Bitcoin Volatility Induces $700 Million Carnage In Crypto Futures

Data shows the cryptocurrency futures market has seen liquidations amounting to $700 million in the past day as Bitcoin has gone through its volatility.

Bitcoin Has Seen Intense Price Action In Past 24 Hours

The past day has been a bit of a rollercoaster for Bitcoin, with the asset registering sharp price action in both directions but ultimately going up as the bulls win out.

The chart below shows what the price action for the cryptocurrency has looked like recently.

Bitcoin Price Chart

From the graph, it’s visible that Bitcoin initially witnessed some sharp bullish momentum, in which the coin not only broke above the $60,000 level, but went up to touch the $64,000 mark.

This high, which is the peak for the year so far, only lasted briefly, however, as BTC crashed down spectacularly to under the $59,000 mark. The asset has since recovered to higher levels, now floating around $62,700.

The rest of the cryptocurrency sector has also gone through its volatility, with prices fluctuating across the coins. As is usually the case with such sharp price action, the futures market has suffered many liquidations.

Crypto Futures Market Has Gone Through A Squeeze In The Past Day

According to data from CoinGlass, the cryptocurrency futures market has witnessed the liquidation of contracts worth more than $700 million in the last 24 hours.

The table below displays the relevant information about the liquidations.

Bitcoin & Crypto Liquidations

It would appear that only $131 million of the liquidations came within twelve hours, suggesting that most of the flush was situated inside the preceding half-day period. This makes sense, as Bitcoin was most volatile inside this window.

It also seems that the long-to-short ratio in this liquidation event has been quite balanced, even though the price has increased in the past day. This would suggest that some aggressive longing occurred as Bitcoin approached $64,000, and the subsequent pullback wiped these top buyers.

The table below shows how the distribution has looked for the various symbols.

Bitcoin & Other Cryptos

As is generally the case, Bitcoin futures contracts have again been responsible for the largest portion of the total market liquidations, contributing around $270 million.

What’s different this time, however, is that this share, although the largest, isn’t even half the total liquidations. This could come down to the fact that speculators may now be playing around with altcoin positions after gaining confidence from the BTC price surge.

Dogecoin, the best performer among the top coins with its 34% jump, has occupied the largest share among the alts, with almost $51 million in liquidations.

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Crypto Futures Razed To Ground As $659 Million Rekt With Bitcoin Crash

Data shows the cryptocurrency futures sector has gone through a mass liquidation event in the past 24 hours as Bitcoin has witnessed a sharp crash.

Crypto Futures Liquidations Have Added Up To $659 Million In Past Day

The cryptocurrency market has seen sharp price action during the past 24 hours. As is usually the case during such volatility, chaos has occurred on the futures side of the sector.

According to data from CoinGlass, almost $660 million in futures contracts have found liquidation on the last day.

Bitcoin & Crypto Liquidations

“Liquidation” here naturally refers to the process that any contract undergoes when it racks up losses equivalent to a specific percentage of the position (which may differ between platforms). The exchange has to close it forcibly.

The above table shows that the longs took the brunt of this liquidation flush, as they saw contracts worth about $568 million decimated. This equals about 86% of the total liquidations in the past day.

The forceful closures have been so lopsided due to the sector observing a sharp drawdown following Bitcoin’s crash that took its price to as low as $41,500.

It’s also visible in the table that about $613 million of the total liquidations came during the last twelve hours alone, which again lines up with price action as that’s when the market was most volatile.

Regarding the individual contributions from each of the different symbols, it’s no surprise that Bitcoin-related contracts occupied the largest share of the liquidations at about $148 million.

Bitcoin Futures

Generally, though, BTC makes up for a huge part of the total market liquidations, but this time, the asset’s percentage share isn’t too extraordinary. Ethereum (ETH) and Solana (SOL) are the next biggest contributors to the squeeze, with about $111 million and $34 million in liquidations, respectively.

Historically, mass liquidation events like the one seen today haven’t exactly been a rare sight in the cryptocurrency sector due to the high volatility that most coins display on the regular and extreme amounts of leverage being easily accessible in many exchanges.

Recently, the interest in the derivatives side of the sector has become especially pronounced, as CryptoQuant Netherlands community manager Maartunn has talked about in a recent post on X.

Bitcoin Spot & Futures Volume

As displayed in the graph, the Bitcoin futures volume has generally been higher than the spot volume during the last few years, but the gap between the two especially widened during the second half of 2023.

The indicator’s value saw some decline in the last couple of months of the year, but the recent values of the metric have still been quite high compared to the norm in the past.

Bitcoin Price

Bitcoin has seen some recovery since its initial crash, as the asset is now trading around the $42,700 mark.

Bitcoin Price Chart

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Crypto Shorts See Carnage As Bitcoin Surges Towards $28,000

Data shows the crypto futures market has observed large liquidations in the past day as Bitcoin has recorded a sharp surge towards $28,000.

Crypto Futures Observed $78 Million In Liquidations In Last 24 Hours

A crypto futures contract is said to be “liquidated” when the derivative exchange with which said contract is open forcefully closes it up. This happens when the contract has accumulated losses of a certain percentage, the exact value of which may differ between platforms.

In this sector, it’s not too rare to see a flood of such liquidations occurring within a short span of time. The reason behind that is the high volatility that most of the assets display on average.

A lot of investors also like to play with extreme amounts of leverage, due to it being readily accessible in many platforms. Leverage alone can raise the risk of liquidation manyfold, so it combined with the high volatility can make it easy for contracts to be flushed down.

During the past day, the crypto market has once again seen some notable volatility, which has led to another mass liquidation event on the futures side, as the data below from CoinGlass shows.

Crypto & Bitcoin Liquidations

As is visible from the table, the crypto market as a whole has seen liquidations of more than $78 million in the last 24 hours. Out of these, $61.88 million involved the short contracts, equivalent to almost 80% of the total.

This naturally makes sense, as this latest liquidation squeeze has been led by a rally in Bitcoin’s price.

Bitcoin Crypto Price Chart

As displayed above, Bitcoin has enjoyed a sharp surge in the past day. At the peak of this rally, the coin had retested the $28,000 level but has since seen a bit of pullback.

The rest of the sector also followed the original crypto in this rally (as is usually the case), which is why shorts around the sector have taken a beating today. The below table shows what the individual contribution towards this liquidation squeeze has looked like for the different symbols in the sector.Bitcoin, Crypto Shorts

As expected, Bitcoin occupies the largest share of liquidations with $31.5 million, while Ethereum is second at $13.06 million. Interestingly, Loom Network (LOOM) is third in this list, despite the asset being just the 71st largest in the sector by market cap.

The altcoin has enjoyed a sharp rally of more than 113% in the past week, which is perhaps why the crypto has had such strong interest behind it on the futures market.

Bitcoin Open Interest Has Rebounded Since The Squeeze

As CryptoQuant analyst Maartunn has pointed out, the Bitcoin open interest, a measure of the total amount of contracts associated with the asset currently open on the futures market, has jumped back since the liquidation flush occurred.

Bitcoin Open Interest

It would appear that more speculators have jumped on the market even after seeing a large amount of traders getting liquidated. Generally, the open interest being high can lead to volatility, so the indicator retracing back to its levels from before the plunge could mean BTC would soon see more sharp price action in the near future.