Data shows that the cryptocurrency derivatives sector has seen many liquidations as Bitcoin has reached the $66,000 mark.
Bitcoin has now recovered to the $66,000 level
The past day has been a great time for Bitcoin investors as the price has proven competitive recovery wavetaking it to the $66,000 level for the first time since late last month.
The chart below shows what the asset’s recent price action has been like.
The chart shows that this 6% increase over the past 24 hours means that Bitcoin is now not far away from surpassing the September high. Breaking that top would take assets to their highest level since July.
As is usually the case, BTC was not alone in this rally as the rest of the sector followed suit. Coins like Ethereum (ETH) and Solana (SOL) have even outperformed the original digital assets, up 8% and 7% respectively.
With all the volatility in the market over the past day, it’s not surprising that the derivatives side has seen a shakeup.
Crypto derivatives have seen $233 million in liquidations today
According to data from MintGlassThere have been a large number of liquidations in the cryptocurrency derivatives market over the past 24 hours. It is said that a contract ‘liquidated‘ when it is forcibly closed by its platform after exceeding losses of a certain extent.
Here is a table with the relevant figures regarding the latest mass liquidation:
Looks like the latest derivatives flush has been short-dominated | Source: CoinGlass
As visible above, approximately $233 million worth of derivative contracts involving all cryptocurrencies have been liquidated during this period. This flush consisted almost entirely of short contracts, as these investors betting on a bearish outcome took a beating of $198 million, representing almost 85% of the total liquidations.
In terms of individual symbols, Bitcoin has predictably come out on top, with almost double the number of liquidations of second-place Ethereum. Although BTC’s share is the highest in the industry, it represents only 39% of the total, implying that altcoins have enjoyed a fair share of their own speculation lately.
The distribution of the latest liquidations by symbol | Source: CoinGlass
Among assets other than BTC and ETH, Solana has seen the highest number of liquidations, at around $11 million. SUI and NEIRO rounded out the top 5 with $7 million and $5 million in contracts, respectively.
A mass liquidation like today’s is popularly called a pinch and since this last event involved a dominance of shorts, it would be known as a short squeeze.
During a tightness, liquidations are reflected in the price movement that caused them, lengthening it and unleashing a wave of further liquidations. This is why these events are often so volatile.
Featured image from Dall-E, CoinGlass.com, chart from TradingView.com