The data shows a huge amount of selling accumulated in cryptocurrency exchanges over the past day as Bitcoin and altcoins crashed.
Bitcoin and Other Assets Have Seen Bearish Action in the Past 24 Hours
The past day has been a volatile time in the cryptocurrency sector as the US Federal Reserve expressed a cautious view on interest rate cuts during the recent Federal Open Market Committee (FOMC) meeting.
Reacting to the news, the Bitcoin selloff trader took the price down below $99,000, but the crash was short-lived, the price of the digital asset is showing a quick recovery.
The trend in the price of the coin over the last five days | Source: BTCUSDT on TradingView
As seen in the graph above, Bitcoin is already back above $102,400, which means the coin has dropped less than 3% over the past 24 hours. Altcoins, however, have not been so lucky, as most of them are still down by significant amounts. Ethereum, the second-largest asset in the sector, saw a 5% loss in this window.
With the price crash in the entire market, it is not surprising that the derivatives side has gone through its own turmoil.
Crypto Longs Are Recently Hit Hard
According to data from CoinGlass, there has been a large number of liquidations in the cryptocurrency market over the past day. “Liquidation” here refers to the potential closing of any open contract after accumulating a certain percentage of losses.
Below is a table showing the numbers associated with recent market fluctuations:
Looks like the liquidations have heavily tended towards long contracts | Source: CoinGlass
As seen above, there have been nearly $790 million in cryptocurrency-related transactions in the past 24 hours. Of these, R662 million of the contracts involved were long, representing 84% of the total. This is natural because the market as a whole has fallen.
Depending on the contributions from individual tokens, Bitcoin and Ethereum have been predicted to come out on top again.
The breakdown of the liquidations by symbol | Source: CoinGlass
Of the rest, XRP, Dogecoin, and Solana stand out, as they each posted $40 million, $29 million, and $23 million by closing, respectively.
The mass liquidation event, popularly known as throttling, is not very unusual in the cryptocurrency sector, because assets are often volatile and dynamic trading is popular. That said, the scale of the recent flush is still remarkable and underscores the high speculative interest present in the market during the bull run.
The squeeze did not discourage these traders, as Bitcoin Open Interest continued to remain at record highs (ATH).
The BTC Open Interest appears to have been climbing alongside the recent price rally | Source: CoinGlass
Featured image from Dall-E, CoinGlass.com, chart from TradingView.com
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