Data reveals that the cryptocurrency sector has experienced significant liquidations as Bitcoin and other digital assets continue to show volatility.
Following news of the US Federal Reserve’s decision to cut back on interest rates, Bitcoin made a considerable recovery, climbing above the $63,000 mark. The recent performance of Bitcoin indicates positive momentum, as evidenced by a noticeable 5% surge in the last 24 hours, bringing it close to the highest levels observed in August.
This upward trend in Bitcoin has positively influenced the entire cryptocurrency market. Various altcoins, such as Solana (SOL) and Avalanche (AVAX), have outperformed Bitcoin, contributing to the broader market surge.
However, this market volatility has created turmoil in the derivatives sector, resulting in extensive liquidations. According to CoinGlass data, the cryptocurrency derivatives market saw $201 million in liquidations over the past 24 hours. In this context, “liquidation” refers to the mandatory closure of an open contract once a specific loss percentage is reached.
The figures indicate that short contracts dominated these liquidations, accounting for approximately $147 million, or nearly three-fourths of the total. This trend is expected, given the significant price increases for Bitcoin and other assets during the period.
Such mass liquidation events, often termed “squeezes,” are relatively common in the highly speculative and volatile world of cryptocurrencies. The recent surge resulted in a “short squeeze,” where short investors were forced to close their positions.
Breaking down the liquidations by individual digital assets, Bitcoin led with $78 million in liquidations, over twice the $36 million registered by Ethereum, the second-highest. Solana followed, with $11 million in liquidations, trailing behind the leading two.
