Bitcoin (BTC) and ether (ETH) futures traders took on some of the largest losses in over a month as prices moved under support levels in the past two days - breaking down from a period of stagnancy.
Bitcoin slumped to just under $28,500 late on Wednesday, marking one of the largest two-day price drops since mid-June. Bitcoin weakness caused majors, such as ether, XRP and solana (SOL) to follow suit, falling as much as 5%.
Liquidations on futures tracking major tokens crossed the $160 million mark in the past 24 hours, pushing to over $320 million in losses since the start of this week. Such losses come amid one of the lowest volatility periods for bitcoin.
Bitcoin futures racked up nearly $50 million in losses, followed by ether at $22 million and litecoin (LTC) at $5 million. Traders of bitcoin cash (BCH), solana, and XRP took on nearly $4.5 million in losses apiece.
Long trades, or bets on higher prices, accounted for 90% of the total liquidations, Coinglass data shows.
Liquidation occurs when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This happens when a trader is unable to meet the margin requirements for a leveraged position or fails to have sufficient funds to keep the trade open.
Large liquidations can signal the local top or bottom of a price move, which may allow traders to position themselves accordingly.
Open interest, or the number of unsettled contracts, rose 1.16%, meaning traded opened more positions but ultimately used significantly lesser leverage – suggesting lesser risk-on sentiment.
Meanwhile, trading firm QCP Capital said in a Telegram broadcast earlier this week that it expected prices to gradually fall lower in the immediate absence of market catalysts. It added that price levels of between $24,000 to $26,000 for bitcoin could be expected in the coming months.”
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