Bitcoin dumps to $30,000 with $8 billion in crypto liquidations as market drops ๐จ This article is 4 years old...
Bitcoin dumps to $30,000 with $8 billion in crypto liquidations as market drops
Crypto markets took a hit Tuesday as $2 billion was lost to โliquidations,โ data from multiple sources shows.
2 min read
Updated: May. 19, 2021 at 3:56 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin fell to under $33,000 on some exchanges, reaching levels last seen in February this year.
Millions gone
โLiquidationsโ occur when traders borrow excess capital from brokerages/exchanges (i.e., โmarginโ or trading futures) to place bigger bets on the assets they trade.ย
They pay a fixed fee for doing so, while exchanges close out these positions at a predetermined priceโwhen the traderโs collateral is equal to the loss on that position. Such a trade is then said to be liquidated.
As per analytics tool Bybt, nearly $8 billion worth of cryptocurrencies were lost in such liquidations in the past day. Of that, $1.42 billion came from Bitcoin trades alone, $1.6 billion from Ethereum trades, and $255 million from XRP trades.
$127 million worth of โmeme coinโ Dogecoin was liquidated as well, and layer-2 network Polygon (MATIC) saw a $46 million hit too.
Futures exchange Bybit took the bulk of those liquidations with over $534 million in rekt trades, followed by Huobiโs $521 million. 83% of all traders were โlongโ their assets, meaning they borrowed capital to bet on even higher prices.
Overall, over 297,260 traders were liquidated, with the largest single liquidation order occurring on Huobi: a Bitcoin (BTC) trade with a value of $63 million.
China FUD behind Bitcoin drop?
As such, the drop seemed to come after a Reuters article suggested China was, once again, banning crypto services among its citizens with new laws. The development was, however, not an official, government-issued stance.
For those new to #Bitcoin, it is customary for the People's Bank of China to ban Bitcoin at least once in a bull cycle. https://t.co/cpUmUemSJr
— Bitcoin Association ้ฆๆธฏๆฏ็นๅนฃๅๆ (@bitcoinorghk) May 18, 2021
Bitcoin trades below its 34-period exponential moving average at press time. It remains in an ugly downtrend.
Meanwhile, Bitcoin wicked to under $30,000 a few hours ago, reaching as low as $29,700 at one point.
This article was updated to include the latest figures.
