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$3.72 billion liquidated as cryptos fall by double-digit percentages

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Crypto traders woke up to $3.7 billion in liquidations today as the market saw a deep pullback, data from markets tool Bybt shows.

The dump came shortly after ETH creator Vitalik Buterin dumped his ‘petcoins’ and Tesla discontinued BTC payments for its cars. Both the moves stirred up controversy and criticism from those in the crypto space.

What happened?

Over 340,000 traders were ‘liquidated,’ with the largest single liquidation order occurring on crypto exchange Huobi—a BTC trade with a value of $38.7 million.

For the uninitiated, ‘liquidations’ occur when traders borrow excess capital from brokerages/exchanges (i.e., ‘margin’ or trading futures) to place bigger bets on the assets they trade. They pay a fixed fee for doing so, while exchanges close out these positions at a predetermined price—when the trader’s collateral is equal to the loss on that position. Such a trade is then said to be liquidated.

Traders were likely overleveraged in the days leading to yesterday, meaning a smallish drop in spot markets led to some accounts getting liquidated, followed by a cascading effect of prices falling further downwards and even more accounts getting liquidated.

Liquidated crypto and where

Of the total of $3.72 billion in liquidations as per Bybt, $3.32 billion (89%) belonged to ‘long’ traders, or the accounts betting on higher asset prices. $1.1 billion of that came from Huobi alone, nearly another billion dollars came from futures exchange Bybit, while $500 million in liquidations came from Binance.

As such, $1.95 billion of all liquidations took place on BTC trades, $629 million took place on ETH, $195 million on Filecoin, and over $137 million on Dogecoin, a memecoin that has been literally memed into becoming the world’s fifth largest cryptocurrency.

Meanwhile, the market shows some signs of recovery at press time. BTC, ETH, and Binance Coin seem to have found a price floor at $50,900, $3,980, and $625 respectively, after falling nearly 10% on average in the past 24 hours.

The post $3.72 billion liquidated as cryptos fall by double-digit percentages appeared first on CryptoSlate.


All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.

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