After more than USD 4bn in cryptoasset trading position was liquidated yesterday, another USD 1bn was liquidated today in just one hour as a selloff in the crypto market intensified, increasing bitcoin (BTC)’s dominance.
Almost 91% of the liquidated positions are long positions, while BTC accounts for around 40% of them. In the past 24 hours, USD 5.77bn has been liquidated, per bybt.com data.
At the time of writing (09:33 UTC), BTC trades at USD 48,110, rebounding from USD 45,917, reached earlier today. The price is still down by 13% in a day, trimming its all weekly gains. It also dropped by 21% from its all-time high of USD 58,641 (per Coingecko.com), reached this past Sunday.
Other coins from the top 10 list are down by 11%-30%, while dozens of smaller altcoins from the top 100 club are down more than 20%.
As many cryptoassets are dropping against BTC, its dominance, or the percentage of the total crypto market capitalization, is on the rise again, reaching almost 64%, or around 2 percentage points more than a day ago, per coinpaprika.com.
Liquidations in one hour:
As reported, long liquidations have become more numerous over the past month or so. With bitcoin (and other coins) breaking all-time highs nearly every passing week, some traders may feel unable to gain significant exposure without margin trading.
However, a growing number of traders can’t afford to maintain their leveraged positions in the event of dips. Hence, the growing frequency of big liquidations.
Leveraged trading refers to borrowing funds so that you can take a larger position than you would be able to with your existing funds so that you can potentially generate a higher profit. However, while margin trading enables traders to amplify their returns, it can also lead to increased losses and liquidations, which is why experienced traders tend to advise newcomers to stay away from leveraged trading.
Moreover, decentralized finance (DeFi) lending platforms liquidated more than USD 102m in the past 24 hours as ethereum (ETH) crashed by around 20% in the same period of time. It’s around USD 10m more than a previous liquidation record, registered in November last year, per debank.com data.
Almost 84% of the liquidations today happened on the Compound platform.
#Binance has temporarily suspended withdrawals of $ETH and Ethereum-based tokens due to high network congestion.
jesus christ didn’t expect to wake up to this, complete deleveraging across the market
2/2 A lot of “if’, “when” and “oeh”, “ah’s” and 20 disclaimers, hence I’ll find some time for a YT video this morn… https://t.co/btWYHe73U7
Still only in spot cause there’s no way I can sleep with leverage in this current market environment.
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– Cryptoasset Margin Trading: How Safe is it?
– 7 Ways to Short Crypto
– Crypto Traders Warn Newbies About New & Super Risky Binance Feature
(Updated at 09:48 UTC: updates throughout the entire text. Updated at 10:15 UTC with DeFi data and new reactions.)