Bitcoin Cash Futures Traders Lose Most in 2 Years as Prices Spike to $320

South Korean trading volumes for the bitcoin offshoot token boomed last week, spurring a price spike last week.

AccessTimeIconJul 3, 2023 at 6:41 a.m. UTC

Traders betting against bitcoin cash (BCH) lost the highest amount in over two years amid a price spike to the $320 level last week, Coinalyze data shows.

Shorts and longs cumulatively lost over $25 million on BCH-tracked futures, which may have contributed to the sudden spike. Shorts refer to bets against any asset, while longs are bets on price rises.

Highest amount of bitcoin cash short liquidations in two years. (Coinalyze)

As of Monday, funding rates have fallen negative across all exchanges that list BCH futures. Negative funding rates indicate that short traders are dominant and are willing to pay long traders to remain in their positions.

BCH traders are paying funding rates as much as -0.05% every 8 hours in fees to exchanges, implying short interest in the tokens is rising.

Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).

Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.

Last week’s moves likely came amid increased BCH trading volumes on South Korean exchanges – whose traders are known for irrational exuberance – and the launch of EDX Markets, a new exchange backed by traditional finance heavy-weights Fidelity Digital Assets, Charles Schwab and Citadel Securities which supports BCH along with bitcoin (BTC), ether (ETH) and litecoin (LTC).

Edited by Parikshit Mishra.

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.