Data shows that the cryptocurrency derivatives sector has seen a large number of liquidations in the past day, while Bitcoin and others enjoyed a rally.
Both Crypto long and short liquidations have been high today
According to data from MintGlassa significant number of liquidations have piled up on the derivatives side of the cryptocurrency sector due to market volatility.
‘Liquidation’ here refers to the forceful closure that an open contract undergoes after incurring losses to some degree (the exact percentage of which may vary from platform to platform).
Below you will find a table with the details of the liquidations that took place in the cryptocurrency sector in the last 24 hours.
As can be seen, liquidations during this period totaled almost $306 million. Of this, $154 million of the affected contracts were long positions, while $151 million were short positions.
This remarkably even split suggests that no side of the market was hit more than the other, which is interesting given the context in which the prices of Bitcoin and other coins have risen over the past day.
It appears that traders have been keen to take bullish positions with high levels of leverage in this recovery rally, leading to some pullback on the way up, overtaking them and adding to the long liquidation counter.
In terms of contribution to derivatives, equal to individual symbols, Bitcoin once again came out on top with just under $98 million in liquidations.
Ethereum (ETH) and XRP (XRP) round out the top three with $37 million and $25 million in liquidations, respectively. These top three also happen to be the top three coins in the market cap list.
However, number four in liquidations does not correspond to the market cap rankings, as it is in fact Dogecoin (DOGE) that trails XRP with almost $16 million in contracts. The memecoin’s high contribution to the squeeze could be due to the fact that its popularity means speculators are more driven to it than larger altcoins like Solana (SOL).
In other news, Bitcoin Open Interest has recently fallen relative to market cap, as analyst James Van Straten noted in an after.
The “Open Interest” refers to a measure of the total number of Bitcoin-related derivatives positions currently open on all centralized exchanges. A high amount of speculative activity generally leads to volatility for the asset, so the ratio of this measure to market capitalization should ideally remain low.
The chart shows that the ratio rose to a high of 2.8% in November, but has since cooled to around 2.4%, a healthier level.
Bitcoin price
Bitcoin’s latest recovery has continued over the past day as the price has reached the $104,000 mark.
