Bitcoin, Ether Traders Lose $200M to Liquidations in Choppy Market

Bitcoin traders alone lost over $103 million.

Jan 27, 2022 at 11:39 a.m. UTC
Updated Jan 27, 2022 at 3:41 p.m. UTC

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Futures traders betting on upside for bitcoin (BTC) and ether (ETH) lost a cumulative $204 million to liquidations as prices dipped over the past 24 hours, Coinglass data show.

Liquidations occur when an exchange closes a trader’s leveraged position as a safety mechanism due to a partial or total loss of the trader’s initial margin. That happens primarily in futures trading, which only tracks asset prices as opposed to spot trading, where traders own the actual assets.

Bitcoin traders alone lost over $103 million as the world’s largest cryptocurrency by market capitalization fell to as low as $35,550 before recovering to over $36,600 in the Asian morning. Ether saw similar price action, falling to under $2,400 before gaining to $2,440 at the time of writing.

Bitcoin slightly recovered after falling to support levels after Wednesday's Fed meeting. (TradingView)

The moves came after a hawkish U.S. Federal Reserve meeting that ended Wednesday. The central bank said it remained committed to keeping inflation in check with a series of planned interest rate increases this year, a move that caused market declines across all major asset classes, including equities and cryptocurrencies.

“Digital assets, including bitcoin, tend to become more correlated with stocks during stress periods when most of the investment markets go risk-off," said Mikkel Morch, director at crypto hedge fund ARK36, in a note to CoinDesk. "Unsurprisingly, then, the crypto markets moved almost in tandem with the stock market following Fed Chair Jerome Powell's press conference in the aftermath of this month’s FOMC meeting." The Federal Open Market Committee (FOMC) meets eight times a year to discuss monetary policy changes and review economic and financial conditions.

A downturn in crypto markets saw nearly $319 million in liquidations in the past 24 hours, most of it from bitcoin and ether traders. Action in altcoins was more muted, with traders of futures tracking Solana’s SOL and Terra’s LUNA losing $8.77 million and $6.55 million respectively.

Crypto traders took on $319 million in liquidations in the past 24 hours. (Coinglass)

More than 53% of all traders were long, or betting on a market gain. Crypto exchange Binance saw over $124 million in losses, the most among all tracked exchanges, followed by OKX, which earlier this month renamed from OKEx, at $92 million. A majority of these trades were focused on bitcoin and ether tracked futures.

Over 96,700 traders had to liquidate positions, data from analytics tool Coinglass showed, with the largest occurring on crypto exchange Bybit – a bitcoin trade valued at over $5.55 million.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

Trending

1
Brian Forde: Why Congress Needs a Crypto 'Truth Teller'

He explained Bitcoin to Barack Obama and ran one of the first election campaigns emphasizing crypto. He says Congress needs more people who understand science and technology.

He explained Bitcoin to Barack Obama and ran one of the first election campaigns emphasizing crypto. He says Congress needs more people who understand science and technology.

2
US Agencies Warn of Attempts by North Koreans to Get IT Jobs While Concealing Nationality

In many cases, these workers say they are U.S.-based and not North Korean teleworkers, and they often take on virtual currency projects.

In many cases, these workers say they are U.S.-based and not North Korean teleworkers, and they often take on virtual currency projects.

3
Oasis Pro Raises $27M for Crypto Securities Trading Platform

CEO Pat LaVecchia, a former MakerDAO compliance adviser, said Oasis Pro is in the “early stages” of integrating with DeFi platforms.

CEO Pat LaVecchia, a former MakerDAO compliance adviser, said Oasis Pro is in the “early stages” of integrating with DeFi platforms.

4
UST Won't Be the End of Algorithmic Stablecoins

The trail for a monetary "Holy Grail" continues, despite Terra’s collapse. So what do we do about it?

The trail for a monetary "Holy Grail" continues, despite Terra’s collapse. So what do we do about it?