Liquidations on crypto-tracked futures exceeded $400 million in the past 24 hours as bitcoin (BTC) dropped to as low as $35,700, setting the tone for a downturn in the broader crypto market.
Liquidations occur when an exchange closes a 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 fell from $39,800 on Thursday morning to below the $36,000 support level following a sell-off in U.S. equities. Reports suggested the plunge came as traders priced in higher rates to curb inflation in the U.S., despite a rally on Wednesday after Federal Reserve Chairman Jerome Powell said the country would do everything in its power to curb inflation.
Over $161 million in liquidations occurred on OKX, the most among crypto exchanges. Binance followed with $104 million while FTX saw $56 million, data showed.
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