Crypto market’s slump liquidates $1.4 billion off the trading board 🚨 This article is 4 years old...
Crypto market’s slump liquidates $1.4 billion off the trading board
In the past 24 hours, nearly 300,000 traders' positions were liquidated as the crypto market took a downturn.
1 min read
Updated: Apr. 7, 2021 at 5:47 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Around $1.4 billion worth of trading positions got liquidated today as the crypto market dove into the red zone, according to crypto metrics platform ByBt.
Earlier today, the price of Bitcoin dipped from $58,660 in the morning to as low as $55,990, dragging most cryptocurrencies alongside.
“$946.71M worth of longs liquidated in the past four hours,” ByBt tweeted earlier.
$946.71M worth of longs liquidated in the past four hours.
?Chart：https://t.co/Bw2cNNXnr9 pic.twitter.com/JSgiqPbiM8— Bybt (@bybt_com) April 7, 2021
Since then, the total amount of liquidated positions—both long and short—increased to $1.38 billion. Notably, 90.85% of them ($1.27 billion) accounted for longs and only $128.41 million—for shorts.
Liquidation is an automatic closure initiated on exchanges when traders’ losing positions reach certain negative thresholds. More often than not this happens to overleveraged positions where traders are using borrowed funds to increase their gains. And the bigger that leverage is, the less of an actual price movement is required for a position to become closed.
Thus, if the market goes against traders’ bets, their positions begin to move towards being liquidated. Notably, the fact that most of today’s liquidations were longs means that the majority of traders were betting on Bitcoin’s price to go up—but the market had other ideas.
As noted in our weekly market report, it was time for traders to de-risk:
Increasing futures premiums and climbing funding rates usually lead to liquidation rounds and sharp pullbacks.
Sign up for more actionable content, sent to your inbox each Tuesday: https://t.co/RQ0PrSDqHT pic.twitter.com/ooqSxyhxz3
— Arcane Research (@ArcaneResearch) April 7, 2021
Among the exchanges, Binance is in the lead with $676.3 million liquidated. It was followed by Bybit ($286.14 million) and Huobi ($205.45 million). Other crypto trading platforms liquidated $86 million or less worth of positions.
At press time, Bitcoin is trading at around $56,800, still down 1.8% on the day. Many other top cryptos are also in the red, including Ethereum ($2,006, -3.5%), Binance Coin ($384.8, -0.4%), Polkadot ($40.11, -6.0%), Cardano ($1.2, -4.1%), and so on.
As CryptoSlate reported, massive liquidations are not unusual on the crypto market. In mid-February, for example, $1.7 billion in crypto liquidations occurred after Bitcoin dipped below $46,000.
Bitcoin Market Data
At the time of press 5:47 pm UTC on Apr. 7, 2021, Bitcoin is ranked #1 by market cap and the price is down 2.24% over the past 24 hours. Bitcoin has a market capitalization of $1.06 trillion with a 24-hour trading volume of $72.49 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 5:47 pm UTC on Apr. 7, 2021, the total crypto market is valued at at $1.9 trillion with a 24-hour volume of $216.59 billion. Bitcoin dominance is currently at 55.79%. Learn more about the crypto market ›
Author 
Liam Frost
Liam Frost is a freelance journalist and editor with over 15 years of experience working for various media outlets across the world.
Latest Bitcoin Stories
Featured Story
Advertise Here
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.