The cryptocurrency market experienced a significant shock when Bitcoin, the largest cryptocurrency by market capitalization, fell below the previously reached $26,000 threshold. This downward move has led to a wave of total liquidations, with traders losing more than $300 million in a 24-hour period.
The fallout from this event is reverberating across the market, with major exchanges posting significant liquidation numbers.
Record liquidations are hitting the market
The crypto market has been rocked by a wave of liquidations as Bitcoin faltered, leading to a domino effect of positions being forcibly closed. According to facts of Coinglass, approximately 112,837 merchants were liquidated in the past 24 hours, resulting in a cumulative loss of $304 million and counting.
Among the affected exchanges, Binance took the lead in liquidations with $100.4 million, followed closely by OKX with $80.62 million. While other exchanges also witnessed liquidations, their impact was relatively smaller.
In the aftermath of Bitcoin’s dip, long positions were the hardest hit by the liquidations, accounting for about $277.45 million (91.22%) of the total. This reflects the overwhelming presence of traders who had anticipated a price increase.
At the same time, short positions also faced liquidations, amounting to approximately $26.71 million or nearly 10% of the total. The volatility of the market proved detrimental to both sides of the trading spectrum.
Amid the widespread liquidations, one trader stands out for making it through the biggest liquidation. A trader on Bitmex posted a massive $9.94 million loss in an XBTUSD swap, highlighting the magnitude of the market upheaval.
Moreover, Bitcoin liquidations alone accounted for $105.54 million, while Ethereum (ETH) witnessed liquidations totaling $33.87 million, further highlighting the far-reaching implications of this event.
Bitcoin drops below $30,000
The global crypto market capitalization also fell below the previously set $1.2 trillion mark with a value of $1.133 trillion at the time of writing, down nearly 3.7% in the past 24 hours. The plunge comes after continued negativity in the market, such as the Securities and Exchange Commission (SEC) lawsuit.
The news had a significant impact on Bitcoin as the asset has lost more than $20 billion in its market cap in the past 24 hours and is down nearly 5%, pointing to potential violent selling pressure. While the top crypto saw a slight upside trend on Sunday, it has since seen a bearish trend.
Meanwhile, at the time of writing, BTC is currently trading below $26,000 with a 24-hour trading volume of $21 billion. An increase from last Tuesday’s previously recorded daily trading volume of $11 billion.
It is important to highlight that amid the significant liquidations, certain traders managed to take advantage of the market movement by strategically shorting their positions. While a significant number of traders took losses as a result of their long positions on Bitcoin, those who correctly anticipated the downtrend are now reaping profits in the current collapsing cryptocurrency market.
Featured image from iStock, chart from TradingView