• Short trades on Bitcoin, Ether and other cryptocurrencies resulted in $200 million in losses.
• Bitcoin-backed futures saw the most liquidations, at over $85 million.
• The market capitalization of cryptocurrencies rose 8.8%, with Okb and BNB Chain’s bnb seeing the biggest gains.
$200M in Losses from Short Trades
Traders betting against a market-wide decline were caught off guard as a broader market recovery in the past 24 hours saw $185 million in shorts, or bets against price rises, getting liquidated. This contributed to over $200 million in overall liquidation losses due to leveraged positions being forcefully closed by exchanges when traders failed to meet margin requirements.
Bitcoin futures recorded the highest liquidations among all cryptocurrencies at $85 million, followed by Ether futures at $58 million, aptos at $3-$4 million, solana at $3-$4 million and solana at $3-$4 million respectively. Crypto exchange Binance suffered the highest losses with over $68 million liquidated while OKX followed suit with an additional loss of around $51 million.
Crypto market capitalization increased 8.8% to reach its highest level since November due to Bitcoin and Ether rising up to over $24,500 and $1,600 respectively. Tokens such as Okb (native token of crypto exchange OKX) surged 20%, BNB Chain’s bnb (BNB) rose to $323 while tokens of layer 1 blockchains such as Solana (SOL) and Polygon’s MATIC added 10%. AI-focused tokens like Fetch (FET) and AGIX also saw a 12% increase since earlier this week.
FTX Collapse Contagion Effects
The uptick in cryptocurrency prices erased losses that stemmed from FTX’s collapse and troubles at crypto lender Genesis – both of which caused a contagion effect on the markets initially but have now been reversed by bullish sentiment across multiple coins/tokens mentioned above.
Large liquidations can signal either a local top or bottom for steep price moves which allows traders to position themselves accordingly based on their investment strategy/risk appetite – especially when it comes to leveraged positions where failure to meet margin requirements could result in significant losses such as seen during this week’s short trades fiasco across multiple digital assets including Bitcoin and Ether futures markets resulting in over 200m worth of losses for many traders involved before recovering back up again soon after due to strong buying pressure from large investors/institutions active within the industry today driving prices further upwards once more towards new all time highs once again not seen before until now..