BTC & ETH Lead the Pack as Liquid Hits $892M in a Day

BTC and the overall cryptocurrency market have been experiencing volatile behavior in the past 24 hours. Liquidity reached a new high of $892.33 million. This massive volatility wiped out leveraged positions on all the exchanges, with BTC/ETH dominating the lost stakes. The event also highlights that the cryptocurrency market is highly unpredictable and acts as an incentive to force traders to close most open positions.

Liquidations are dominated by BTC and ETH

The most liquid asset was Bitcoin, which accounted for $487.13 million in position or about 4.97K BTC. Ethereum placed second at $85.54 million, wiped out by 22.14K ETH in liquidation. BTC and ETH are the most traded in the crypto space and, therefore, are more vulnerable to any rapid price change.

This increase in liquidity is in line with the increase in trading activity in these two funds, both of which have seen significant change over the past day. These cryptocurrencies affected traders with long and short positions as the price moved erratically, causing portfolio losses.

Heavy losses for Altcoins

While Bitcoin and Ethereum showed the most liquidation, many altcoins suffered significant losses. Ripple (XRP) faced a liquidation of $38.20 million, affecting 16.75M XRP. Dogecoin (DOGE) was next on the list with $22.54M in liquidation and 52.66M DOGE. Another prominent altcoin, Solana (SOL), suffered a liquidation worth $22.17M/94.47K SOL.

Others included Sui (SUI), $11.18M; Worldcoin (WLD), $7.74M; and Optimism (OP), $6.79M. Some of the lesser known tokens that participated in the total liquidations included Peanut (PNUT), Cardano (ADA), Litecoin (LTC), and Wifedoge (WIF,) which showed that the selling was quite extensive.

Liquidations exchange: OKX leads

During this liquidation wave, OKX was the most affected as it faced a total of $380.63 million in liquidation. Interestingly, OKX also facilitated the largest single spot liquidation of $18.94M in BTC/USDT, which is why the exchange can be considered a medium for high-leverage trading.

Binance was the second most affected exchange with $255.73M liquid and Bybit with $140.85M. Some of the other exchanges affected included Bitfinex with $59.05M, HTX (formerly Huobi) with $37.74M, CoinEx with $12.26M, and BitMEX with $5.87M.

The wide impact in the exchanges is due to the large trading that takes place and the high level of leverage, which promotes large losses when prices move quickly.

A close look at the liquidity data also shows that short positions are at the heart of most losses on the various platforms. For example, at OKX, 90.75% of liquidations were short, while at Binance and Bybit, they were 74.22% and 80.46%, respectively.

Even so, long careers weren't completely off the hook. In the case of Bitfinex, long position slopes represented 33.47%, which means that the market was not one-sided during the liquidation event.

Impact on traders

This $892 million liquidation spree is a good example of what happens in leveraged trading. Since leverage acts as a multiplier of the account balance, it is equally an increase in risk; therefore, traders are advised to control their risks.

Due to the lost territories of Bitcoin and Ethereum and the widespread effects on altcoins and exchanges, traders should be careful. As the digital asset market progresses, it will be even more important for a player to predict market trends and avoid or mitigate risks that may be inherent in this type of business.