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Bitcoin dumps to $30,000 with $8 billion in crypto liquidations as market drops Bitcoin dumps to $30,000 with $8 billion in crypto liquidations as market drops
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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 โ€˜liquidations,โ€™ data from multiple sources shows.

Bitcoin dumps to $30,000 with $8 billion in crypto liquidations as market drops

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

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Bitcoin fell to under $33,000 on some exchanges, reaching levels last seen in February this year.

Millions gone

โ€˜Liquidationsโ€™ occur when traders borrow excess capital from brokerages/exchanges (i.e., โ€˜marginโ€™ 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 priceโ€”when the traderโ€™s 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.

Image: Bybt

$127 million worth of โ€˜meme 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 Huobiโ€™s $521 million. 83% of all traders were โ€˜longโ€™ 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.

Bitcoin trades below its 34-period exponential moving average at press time. It remains in an ugly downtrend.

BTC/USD via TradingView.

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.

Posted In: , Analysis, Trading