Traders with too much leverage become victims of volatility again. 190 million US dollars liquidated in minutes.
Bitcoin’s (BTC) plunge to $27,700 and rebound seconds later was a shock to some and financial ruin to others, data shows.
According to on-chain analytics website Glassnode, futures traders with long positions lost a total of $190 million on Binance alone in just one hour – more than ever before.
One exchange, 60 minutes, $190 million.
These numbers underscore the current behavior of Bitcoin Sunrise which is circling new all-time highs and, along with Ether (ETH), is considered the hottest asset of 2021.
Long positions had seen almost unbridled growth throughout most of December and into the new year. The upward movement hardly encountered any resistance.
Despite warnings from various analysts that the bull market could not last forever, many traders took a high risk and bet on further new highs. In this case, $34,800 was a definite top. Within 24 hours, the BTC/USD pair has subsequently dropped to $7,000. Within one hour in the process, it even dropped by 4,000 US dollars.
Bitcoin futures long liquidations (Binance) annotated chart.
The result for those who had too much leverage was clear to see.
„190,000,000 US dollars (in long positions) were liquidated on #Binance within 10 minutes. Largest value yet,“ as Glassnode commented on a chart showing Binance liquidations.
Risk versus reward
As Cointelegraph reported, short positions were liquidated en masse last week when Bitcoin broke through the $30,000 level for the first time. As a result, short sellers on all exchanges lost a combined $100 million.
„Get used to declines around US$5,000 as we get into the US$100,000. That comes with the territory,“ Samson Mow the head of strategy at bitcoin technology firm Blockstream summarized on Twitter.
Meanwhile, trading in derivatives linked to bitcoin and ether continue to be extremely popular. CME Group, one of the pioneers in bitcoin futures, will launch ether futures in the first quarter of this year.