Data suggests that the cryptocurrency derivatives sector has seen a significant amount of liquidations in the past day as Bitcoin and others enjoy a rally.
Long and short crypto liquidations were high today
According to data from Queen Glassa large amount of liquidations have accumulated on the derivatives side of the cryptocurrency sector following market volatility.
“Liquidation” here refers to the forced closure of any open contract after it has accumulated losses of a certain degree (the exact percentage of which may vary between platforms).
Below is a table showing data on liquidations that occurred in the cryptocurrency sector during the past 24 hours.
As can be seen, liquidations totaled approximately $306 million in this window. Of these contracts, $154 million of the contracts in question were long positions, while $151 million were short contracts.
This split significantly indicates that neither side of the market was affected more than the other, which is interesting given the context in which Bitcoin and other currencies have seen their prices rise over the past day.
It appears that traders have been eager to place bullish positions with a significant amount of leverage associated with this recovery rally, causing any pullbacks on the way to be caught and adding more to their long liquidation counter.
In terms of the contribution to derivatives flowing through individual tokens, Bitcoin is once again at the top with just under $98 million liquidated.
Ethereum (ETH) and Ripple (XRP) took the top three spots with $37 million and $25 million liquidated, respectively. These top three currencies also happen to be the top three currencies on the market cap list.
However, the fourth place in liquidations does not correspond to the market cap ranking, as it was actually Dogecoin (DOGE) that followed XRP with contracts worth almost $16 million. A large contribution to the memecoin squeeze could be due to the fact that its popularity means that speculators are attracted to it more than larger altcoins like Solana (SOL).
In some other news, Bitcoin’s open interest has declined relative to market cap recently, as analyst James Van Straaten noted at X mail.
“Open Interest” refers to a measure of the total amount of Bitcoin-related derivatives positions currently open on all centralized exchanges. A high amount of speculative activity generally causes volatility of the asset, so the ratio of this measure to market capitalization should ideally be kept low.
It is clear from the graph that the ratio rose to a high of 2.8% in November, but its value has since declined to around 2.4%, which is a much healthier level.
Bitcoin price
Bitcoin’s recent rally has seen a continuation over the past day as its price reached the $104,000 mark.
The post Crypto Liquidations Cross $300 Million As Bitcoin Reclaims $102,000 first appeared on Investorempires.com.