$450 Million In Crypto Futures Liquidates As Market Surges

Data shows $450 million in crypto futures has liquidated over the last 24 hours as Bitcoin has broken past $47k and the overall market has observed a surge.

$450 Million In Crypto Futures Liquidates, 75% Of Which Involves Shorts

Yesterday, Bitcoin and the wider market started on a sharp uptrend, taking the total market cap to around $2.13 trillion today, an increase of 6% over the past day.

In case anyone isn’t familiar with the crypto derivatives market, it’s best to look at a brief working first to understand the concept of liquidations.

In futures margin trading, an investor puts forth some collateral (called the margin) against which they can loan an amount many times their initial investment.

This is known as the “leverage.” With the help of leverage, holders can earn magnitudes more profit on their position.

However, it is also true that any losses incurred will also be amplified by the leverage. When a certain amount of the margin has been destroyed due to these losses, the exchange forcefully closes the position.

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This is precisely what a “liquidation” is. Now, here is some data about the crypto liquidations taking place over the past 24 hours:

A massive amount of liquidations has taken place over the past day | Source: CoinGlass

As you can see in the above table, over the past four hours alone, around $54 million in crypto futures liquidations has occurred.

In the last twelve hours, more than $137 million in futures has liquidated. Overall, the figure reached $455 million over the span of the last twenty-four hours.

The largest single liquidation of these happened on derivatives exchange Bitmex, involving an XBTUSD pair, and measured $10 million in value.

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It also seems that around 75% of these liquidations was from short traders (that is, investors who betted the price of cryptos will go down in the near future).

Such large liquidations aren’t uncommon in the crypto futures market as many exchanges offer over 100x in leverage. This high leverage combined with the fact that coins are highly volatile makes margin trading quite risky in the market.

Bitcoin Price

At the time of writing, Bitcoin’s price floats around $47.7k, up 15% in the last seven days. Over the past month, the crypto has gained 27% in value.

The below chart shows the trend in the price of the coin over the last five days.

BTC's price looks to have observed a sharp surge over the past twenty-four hours | Source: BTCUSD on TradingView

Yesterday, Bitcoin finally broke past the $45k barrier again and sharply reached to the $47k level for the first time in many months.

Featured image from Unsplash.com, charts from TradingView.com