Bitcoin liquidations reach $361M as traders navigate volatility

In the fast-paced world of cryptocurrency trading, the last 24 hours have seen significant upheaval, with over $361 million worth of leveraged trades being liquidated. The leading cryptocurrency, Bitcoin, experienced a rollercoaster ride, reaching a new all-time high of $73,050 before retreating below $70,000 on March 12. This drastic price movement has sparked a flurry of activity among traders, with some anticipating a correction while others fear missing out on further rallies.

Market dynamics: Long positions erased, volatility persists

Most of the liquidations were attributed to long positions, amounting to a staggering $258 million loss. Conversely, short sellers faced losses of over $103 million. This massive liquidation event marks the largest long flush-out since March 5, underscoring the heightened volatility in the cryptocurrency market.

Despite the substantial liquidations, volatility in Bitcoin’s price was relatively contained compared to previous instances. The price swung by 4.85% between its low of $69,365 and high of $72,733, according to CoinGecko. As of the time of publication, Bitcoin has stabilized around $71,400.

According to insights from 10x Research, the surge in volatility can be attributed to traders’ conflicting sentiments. Some traders are growing increasingly nervous about a potential price correction, particularly as Bitcoin has failed to rally during United States trading hours, coinciding with the launch of ETFs. Concurrently, there is a prevailing fear of missing out (FOMO) among investors, fueling speculation that the rally may persist.

Additionally, 10x Research highlighted a 5% increase in futures open interest over the weekend, suggesting that traders actively engage in the market with tight stop-loss orders. This influx of activity underscores the uncertainty prevailing among market participants.

Impact across the cryptocurrency landscape

Bitcoin and Ether led the pack in terms of liquidations, with losses amounting to $106.3 million and $73.3 million, respectively. Other cryptocurrencies such as Solana, Dogecoin, and the Bitcoin-based memecoin Ordi (ORDI) also witnessed significant liquidations, indicating the widespread impact of the market turbulence.

Crypto exchanges bore the brunt of the liquidations, with OKX experiencing the highest losses, totaling $152 million, followed by Binance with combined losses of $128.4 million. These exchanges serve as key hubs for cryptocurrency trading, and their involvement underscores the scale of the liquidation event.

Short sellers have faced considerable challenges amidst Bitcoin’s relentless rally. Research from S3 Partners revealed that short sellers incurred losses exceeding $6 billion in their attempts to bet against publicly traded crypto firms during the first 11 months of 2023. This staggering figure coincides with Bitcoin’s remarkable surge of 130% to $37,800 over the same period, highlighting the uphill battle those betting against the cryptocurrency face.