Crypto Bulls Suffer $580M in Liquidations as Bitcoin Plummets 8%; Ether, Solana, and Dogecoin Experience Significant Declines
Crypto Bulls Suffer– In the past 24 hours, major cryptocurrencies have plunged up to 20%. Early Asian trading hours saw movements from a wallet linked to Mt. Gox, which spooked traders and sent the market into a downward spiral, averaging a 10% drop.
Bitcoin (BTC) fell 8%, briefly dipping below $54,000 before a slight recovery. This move wiped out all gains since February. Ether (ETH) dropped over 10%, Solana’s SOL and Cardano’s ADA each fell 8%, and Dogecoin (DOGE) plummeted nearly 18%.
According to Coinalyze, this caused over $580 million in liquidations tied to long positions—bets on higher prices—making it one of the largest liquidation events this year. Bullish bets on Bitcoin and Ether alone saw losses exceeding $380 million. The largest single liquidation order occurred on Binance, involving an ETH trade valued at $18.4 million. Additionally, open interest, which reflects the number of unsettled futures bets, dropped 12%, indicating a withdrawal of funds from the market.
Liquidations happen when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This occurs when a trader can’t meet the margin requirements for a leveraged position, essentially lacking the funds to keep the trade open.
The recent market turmoil was triggered by the defunct exchange Mt. Gox moving significant amounts of BTC to a new wallet, likely in preparation for creditor repayments. Mt. Gox is set to start distributing assets stolen in a 2014 hack this month, following years of delays. Repayments will be made in Bitcoin and Bitcoin Cash, potentially adding selling pressure to both markets.
Trading firm QCP Capital shared in a Thursday Telegram broadcast that they foresee a sluggish market in the coming months: We anticipate a subdued Q3 for BTC as the market remains uncertain around the supply from the Mt. Gox release.
FAQs
What caused the $580 million in liquidations?
The liquidations were triggered by a significant drop in the price of major cryptocurrencies, including an 8% fall in Bitcoin. This sharp decline caused traders who had bet on higher prices (long positions) to lose their initial margins, leading to forced liquidations.
How much did Bitcoin fall in value?
Bitcoin fell by 8%, briefly dipping below $54,000 before experiencing a slight recovery.
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