Data shows that crypto shorts saw a high number of liquidations over the past day as BTC saw a sharp rise towards $31,000.
The crypto futures market recorded high liquidations over the past day
The past day was volatile for the crypto market as Bitcoin and other assets experienced strong bullish momentum. As usual, this volatility has caused some chaos on the futures side of the sector.
The table below shows what liquidations looked like in the crypto futures market today:
It seems that a large number of liquidations have taken place today | Source: CoinGlass
As shown above, the crypto futures market as a whole saw nearly $120 million in liquidations in the last 24 hours. Short-term contracts accounted for almost $86 million of this.
Most of the volatility during this period is due to the rise in assets in this sector, so it makes sense that short sellers would bear most of the brunt. Mass liquidation events are popularly called “squeezes.” Since this liquidation event primarily affected the shorts, it would be an example of a “short squeeze.”
The table also shows that most of this short squeeze ($65 million) took place in the last twelve hours alone. This is again in line with price developments, as volatility was most pronounced during this period.
Now here you can see how the last day’s liquidations were distributed across the different symbols in the sector:
The distribution of liquidations by symbol during the last 24 hours | Source: CoinGlass
Bitcoin futures contracts appear to have contributed the largest share of this flood of liquidations today, while Ethereum had the second largest share. Followed by these two largest assets in the industry are the altcoins Chainlink (LINK) and Solana (SOL).
The reason these two cryptos have seen such high liquidations is because their rallies have been quite notable (with LINK posting a 35% gain and SOL a 28% gain over the past week), giving these assets significant attention was given as a gift, which was the case, naturally enticed traders to open associated futures positions.
Liquidation bottlenecks like today are not a particularly rare occurrence in the crypto sector, as the general volatility of most assets is high and therefore volatile days like today can often occur.
However, according to CryptoQuant analysts, traders do not seem to be discouraged by today’s liquidations Maartunn has noted that open interest in Bitcoin has continued to rise.
The value of the metric has increased in the last few days | Source: @JA_Maartun
The “open interest” here is a measure of the total number of open positions on the Bitcoin futures market. As can be seen from the chart, this indicator is now close to the $10 billion mark.
Earlier in the day, Bitcoin had broken through the $30,900 mark, but the asset has since experienced a decline. Nevertheless, the coin has not fallen much as it is still trading at around $30,600.
BTC recently experienced a strong uptrend | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, charts by TradingView.com
Source : bitcoinist.com