Steep Drops in Bitcoin, Ether Cause Over $250M in Futures Losses

BTC fell 9% in the past 24 hours, the most among major cryptocurrencies, while ETH dropped 6%, CoinDesk data shows.

AccessTimeIconSep 14, 2022 at 8:44 a.m. UTC
Updated May 11, 2023 at 5:26 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin (BTC) and ether (ETH) both fell below their recent support levels in the past 24 hours in moves that caused over $250 million in liquidations, according to data from Coinglass. The crypto markets followed a drop in U.S. equities after the release of higher-than-expected inflation readings for August.

Futures tracking bitcoin lost upward of $130 million, while ether futures lost $125 million. Ethereum classic (ETC) futures saw over $10 million in losses – an unusual figure for the asset – amid recent trading interest in the tokens.

Bitcoin fell 9% in the past 24 hours, the most among major cryptocurrencies, while ether dropped 6%, CoinDesk data shows. Ether dropped to as low as $1,560 during late U.S. hours on Tuesday, before recovering to as much as $1,622 during Asian morning hours on Wednesday.

The sudden drop on Tuesday night was prompted by traders reacting to higher-than-expected consumer price index numbers.

Elsewhere, XRP dropped 8%, solana’s SOL fell 7%, and cardano’s ADA declined 7.5%. Outside of major cryptocurrencies, cosmos’s ATOM fell 11%, ApeCoin’s APE dropped 12%, and luna classic (LUNC) dropped 14%, continuing slides from earlier this week.

Bitcoin-tracked futures lost upward of $130 million, while ether futures lost $125 million. (Coinglass)
Bitcoin-tracked futures lost upward of $130 million, while ether futures lost $125 million. (Coinglass)

Data suggests part of the price volatility on ether futures came as funding rates surged to yearly highs of nearly 0.15%, as analytics firm Coinalyze noted on Twitter.

Funding rates are periodic payments made by traders based on the difference between prices in the futures and spot markets. Depending on their open positions, traders will either pay or receive funding.

The payments ensure there are always participants on both sides of the trade. Participants use sophisticated strategies to collect funding rates while hedging losses due to price movements – which creates market dynamics that contribute to price volatility.

Meanwhile, some markets analysts told CoinDesk that bitcoin is losing its appeal as a potential “inflation hedge."

“In countries where currency depreciation has been greatest, such as Japan, where the dollar to the yen has gained more than 20% since the beginning of the year, bitcoin has lost 35% of its value,” currency trader Daniel Kostecki of investment company Conotoxia said in a Telegram message.

“Against the Korean won, the dollar has appreciated 15% since the beginning of the year, while the BTC/KRW exchange rate has fallen more than 40% in that time,” Kostecki remarked, adding that “even gold was not been able to counter current inflationary trends.”

Disclosure

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

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.