According to Coinglass data, cryptocurrency traders have incurred losses of 1 billion USD due to liquidations within the past 24 hours. This comes as the digital asset market faces one of the worst sell-offs of the year, leading Bitcoin’s price to drop to its lowest level in two months.
Bitcoin, the largest cryptocurrency, has experienced a 7% decline to around 26,900 USD, after dipping to nearly 25,000 USD earlier in the day – its lowest point since June. Coinglass data reveals that approximately 821 million USD worth of long positions have been liquidated. Bitcoin traders (BTC) have borne significant losses, with 472 million USD worth of long orders being liquidated, followed by Ether (ETH) at 302 million USD.
This marks the largest BTC liquidation in a single day since June 2022, as shown by Coinalyze data. This occurred during a period when the price of the leading cryptocurrency sharply plummeted to around 17,000 USD.
The liquidations happened as cryptocurrency prices took a dramatic hit on Thursday afternoon in the US, turning this month’s slow downward trend into a bloodbath amidst financial market concerns over depreciating foreign currencies, China’s economic uncertainty, and bond yields reaching their highest levels in years. Prominent cryptocurrencies like BTC and ETH have experienced double-digit losses, reaching their lowest points since the beginning of the summer season.
Liquidations occur when a trading platform closes a leveraged trading position due to the loss of a portion or the entirety of the trader’s initial investment, known as “margin.” This happens when traders fail to meet margin requirements or lack sufficient funds to sustain open positions. As asset prices decline, this dynamic can trigger a cascade of liquidation events, exacerbating losses and pushing prices down.