Cryptocurrency traders suffered $1 billion of losses in liquidations over the past 24 hours, according to Coinglass data, as digital-asset markets suffered one of their worst sell-offs of the year and bitcoin's price fell to a two-month low.
Bitcoin, the largest and original cryptocurrency, tumbled 7% to about $26,900, after earlier in the day dropping close to $25,000, the lowest since June.
This was the largest level of BTC liquidations for a single day since June 2022, Coinalyze data shows, around the time when the leading crypto's price plummeted to $17,000.
The liquidations occurred as crypto prices fell through the floor during Thursday afternoon U.S. hours turning this month's slow downtrend into a bloodbath amid financial markets jitters with crumbling foreign currencies, Chinese economic worries and bond yields ripping to multi-year highs. Crypto majors such as BTC and ETH saw near double-digit losses, falling to lowest since early summer.
Liquidations happen when an exchange closes a leveraged trading position due to a partial or total loss of the trader’s initial money down or "margin" – if the trader fails to meet the margin requirements or doesn't have enough funds to keep the trade open. When asset prices nosedive, the dynamic can kickstart a cascade of liquidations, exacerbating losses and price declines.
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