Thursday October 17, 2024 ▪
4
min read ▪ by
The world of cryptos, known for its volatility, has once again proven its unpredictable nature. In just 24 hours, over $287 million was liquidated across major exchanges. A figure that resonates as a warning for leveraged traders exposed to sudden and brutal market movements. This new wave of liquidations spares neither Bitcoin nor Ethereum, two pillars of the crypto market, which have seen their valuations severely impacted.
A major shake-up for the crypto market
The last 24 hours were marked by a liquidation of more than $287 million on the main crypto exchange platforms. Long positions were particularly affected, with significant liquidations on platforms like Binance ($132.55 million) and OKX ($120.37 million). Among the most affected cryptos, Bitcoin saw around $80 million, or more than 1,180 BTC, disappear. Ethereum, for its part, was not left out with $66.52 million liquidated, or nearly 25,390 ETH. This situation once again highlights the dangers traders face when relying on heavily “leveraged” positions in such a volatile environment.
Investors also point to the largest individual liquidation, recorded on OKX, where a $6.55 million position in ETH/USDT was wiped out in seconds. This type of massive liquidation is often triggered by sudden market movements, reinforced by leverage. Thus, “this type of movement is a stark reminder of the risks associated with trading with high leverage,” according to Phoenix Group, which has been closely monitoring the liquidation data.
The role of leverage and the outlook
Beyond the raw numbers, this wave of liquidations provides information on the growing importance of leveraged positions in the cryptocurrency market. According to data provided by Phoenix Group, a large majority of liquidations came from long positions: 64.81% of liquidated positions on Binance were long, compared to 60.37% on OKX. This interest in leverage is explained by the opportunities it offers during a bull market but also exposes traders to increased risks in the event of a sudden reversal.
Investors believe this situation could repeat itself if market volatility persists. Additionally, rising open interest (OI) is a key indicator that could signal further volatile moves to come. Caution is therefore required for traders and investors who must review their risk management. Such a situation also reveals the fragility of the crypto ecosystem in the face of sudden movements and global macroeconomic uncertainty.
This new wave of massive liquidations is a stark reminder of the extreme volatility of the cryptocurrency market and the dangers of leveraged trading. Highly “leveraged” positions, particularly on large platforms, are real time bombs in the event of strong price fluctuations. Thus, investors and traders should closely monitor upcoming movements, especially open position data, to avoid further catastrophic losses.
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A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.
