It is blood on the streets in the cryptocurrency space as flagship cryptocurrency asset, Bitcoin has dropped by over 11% in the last 24 hours to trade in the $30,000 support zone, a price point Bitcoin has not traded since July 2021.
As a result of the market downturn, data from Coin Glass reveals that 207,965 traders have been liquidated to the tune of $846.54 million in the last 24 hours as the market continues its selloff, caused by policy decisions in the biggest economy in the world, the United States.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open). Liquidation occurs in both margin and futures trading.
What you should know
- Longs accounted for $699.44 million or 82.46% of the total liquidations seen in the market, as of the time of this writing. The shorts accounted for the rest.
- The entire cryptocurrency market capitalization also fell. The market cap fell below the $1.5 trillion support to currently stand at $1.41 trillion as of the time of this writing. The market is down over 10% in the last 24 hours
- The Fed hiked its interest rate to 1%, the largest increase since 2000, as it handed down its policy decision last week Wednesday.
- We are currently seeing the effects of the policy decision made by the federal reserve. The U.S. Fed increase of the interest rate brought about a strong dollar index (a measure of the strength of the U.S. dollar).
- As of the time of this writing, the dollar index is trading at a 20 year high, currently above 104 basis points.
- When Bitcoin sneezes, the altcoins catch a cold and this was exactly what played out yesterday. We saw a massive sell-off in the altcoin market, with many tokens losing 10% and more.
- In fact, the selloff saw LUNA, DOT and AVAX lose their top 10 status, as they have been overtaken by stablecoin’s UST and BUSD. There are currently four stablecoins ranking among the top 10 by market cap.
- Okex exchange accounted for the most liquidation, representing $258.86 million or 30.52% of the total liquidations. Binance came in second, accounting for $170.31 million which represents 20.08%.
Surprisingly, Ether liquidations accounted for the most as expected, representing $293.16 million or 34.63% of the total liquidations in the last 24 hours. Bitcoin came in second, accounting for $285.54 million and in third place, LUNA, accounted for $28.21 million.
The Luna Foundation Guard (LFG) programmable stablecoin, UST, has lost it peg to the U.S. dollar as it currently trades at 0.92 cents. The wallet address holding the approximate 42,500 BTC that the LFG bought to defend the peg has been moved entirely from the wallet it was being held as many suspect the foundation is trying to sell its holdings to maintain its peg. This is a double edged sword as they will be selling their BTC in an already high selling pressure market.