Nearly 90% of all liquidations in the past 24 hours came from traders betting on the upside.
Futures traders betting on the continued recovery of crypto prices were caught in the crosshairs after bitcoin (BTC) dropped to under $40,000 in the past 24 hours. Traders racked up over $430 million in losses to liquidations, according to data from Coinglass.
Liquidations occur when an exchange closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin. This happens primarily in futures trading, which only tracks asset prices as opposed to spot trading, where traders own the actual assets.
Longs, or positions of traders betting on upward prices, took the biggest hit and accounted for nearly 90%, or $386 million, of all losses in the past 24 hours. Shorts saw a relatively lower $44 million in losses.
Traders of bitcoin futures lost $156 million alone, followed by ether (ETH) futures at $102.85 million, and SOL futures, which track Solana’s native tokens, at $12.41 million. Futures Dogecoin’s DOGE and Stepn’s GMT notched up a combined $16 million in losses after a run last week.
Crypto exchange OKX notched up $149 million in liquidations, the largest among all crypto exchanges. Nearly 96%, or $143 million, were those stemming from long positions. Bitmex saw the highest liquidated value, however, with a single $10 million bitcoin position getting closed on the exchange.
The losses came as bitcoin lost 5.2% in the past 24 hours, data from CoinGecko shows. Ether declined by a similar percentage, while Solana’s SOL and Polkadot’s DOL tokens slid some 8%.
The drop in crypto markets came as recession fears mounted in the U.S. on Monday following hawkish comments by the U.S. Federal Reserve (Fed) comments last week, which has since contributed to a slide in global markets.
Stocks and oil also slid on Monday. The Dow closed at 1.19% lower, the S&P 500 dropped 1.69%, while technology-heavy Nasdaq slid even further at 2.18%. Asian markets inched lower on Tuesday, with Japan’s Nikkei 225 falling 1.89% and declines of 0.80% in Singapore and India’s Sensex, respectively.