On Feb. 24, 2023, the cost of bitcoin rose to a peak of $23,829 per unit on March 1. Just one day later, however, the digital currency experienced a sudden dip and fell below the $23,000 threshold. This unexpected plunge triggered long liquidations on various crypto derivative exchanges and resulted in more than $237 million in losses.
Crypto Exchanges Lose $237 Million in 24 Hours
In the last 24 hours, 65 cryptocurrency derivative exchanges have witnessed a trading volume of $171 billion, which is a 21.85% decrease from the day before. Despite this, the overall trading volume for bitcoin futures still stands at a high of $791 billion, with open interest and trading volume only increasing. Binance, in particular, has noted a total open interest of $468 billion.
On Feb. 21.2023, the open interest for bitcoin futures had reached an all-time high of $9.73 billion, but has since dropped to $9.06 billion. On March 2, the BTC price had remained above the $23,000 mark for around seven days, prior to its sudden fall.
At 8 p.m. Eastern Time on March 2, the coin’s value had plunged to $22,259, which was the lowest it had been in some time. Despite this, many long positions still remained, with the overall positions 5% longer than before. When the price dropped, 78,116 traders were liquidated, resulting in a total of $237.97 million in liquidations.
On the same day, long liquidations totalled $206 million, with 90% of the positions being long. According to Coinglass, the single largest liquidation happened on OKEx, with a market value of $4.16 million. This was followed by Binance, Bybit, Huobi, Coinex, and Deribit.
When it comes to short positions, $9.2 million had been betting against BTC’s value rising. The liquidations on March 2 were almost as high as the long liquidations that occurred on Feb. 8, where $254 million was lost. This number was closer to the amount liquidated on Jan. 17, which was $190 million.
The recent drop in the value of Bitcoin has had a domino effect across the cryptocurrency derivatives market, with over $200 million worth of long positions liquidated. This has led to an increase in traders and investors taking more caution when trading digital assets.
It has been reported that a majority of these liquidations occurred on leading exchanges such as Binance, Huobi, Bybit, and OKEx. Coinex and Deribit also experienced significant losses. The surge in liquidations was primarily caused due to the decrease in the value of Bitcoin on April 16.
The drop in the price of Bitcoin led to a decrease in open interest and trading volume on the exchanges. The long positions liquidated amounted to $220 million, while the short positions liquidated amounted to $11 million. The long liquidations were mostly made up of perpetual futures and perpetual swaps.
The decrease in open interest and trading volume has also led to a decrease in the value of other digital assets. The drop in open interest and trading volume has been attributed to traders and investors taking a more conservative approach due to the volatility of the cryptocurrency market.
The decrease in the value of Bitcoin has led to the re-emergence of the term “REKT”, which refers to investors and traders who have been wiped out by the drop in the value of Bitcoin.
These developments demonstrate the need for traders and investors to be more prudent with their investments, as any sudden drop in the value of digital assets can lead to significant losses. As the cryptocurrency market continues to experience volatility, it is likely that traders and investors will take more caution when trading digital assets.
