Key Highlights:
- Crypto-tracked futures experienced more than $1 billion in liquidations over the last 24 hours, triggered as Bitcoin plummeted from its record high above $103,000 on Thursday to just under $92,000 on Friday.
- Notably, BTC futures accounted for almost $500 million in liquidations, primarily from long positions, with $420 million originating from traders betting on rising prices.
- ETH futures incurred a smaller amount at $85 million in liquidations.
Liquidations happen when an exchange forcibly closes a trader's leveraged position due to insufficient margin. This usually occurs when the trader cannot fulfill margin requirements or lacks adequate funds to sustain the trade.
In total, over 156,000 traders faced liquidations, with the largest single liquidation on the OKX exchange, involving a BTC/USD trade valued at $18 million. Remarkably, 89% of the traders who faced liquidations were those who had bet on price increases.
Beyond BTC and ETH, futures associated with Dogecoin (DOGE) and XRP collectively reported losses exceeding $50 million, following a price reversal after a multi-week rally that had pushed open interest on their futures to peak levels last month.
The drop in prices led to a shift in the crypto fear and greed index from "extreme greed" to just "greed," marking its lowest point in over a month. This index analyzes volatility, pricing, and social media trends to gauge market sentiment.
