As the cryptocurrency market opens the first week of November, it does so with a stark bearish vibe as Bitcoin and other digital assets tumble drastically. Bitcoin (BTC), the leading cryptocurrency, has fallen below $104,000, currently trading at $103,800, marking a steep weekly loss of over 9% at this level for the first time since mid-October.
The last time Bitcoin was traded at such a low point was back in June, highlighting a concerning potential multi-month reset for the asset if these levels persist.
Ethereum (ETH) is not spared from the misery, seeing its price dip to $3,480—the lowest it has been since early August—with a staggering weekly loss of approximately 15%. Other significant crypto assets have followed suit, reflecting the extent of the recent selloff and the resulting chaos for futures market traders.
Massive Liquidations in Crypto Derivatives Market
According to recent data, the cryptocurrency derivatives market has been rocked by nearly $1.4 billion in liquidations over the past 24 hours. This number is critical as it indicates the forced closure of open contracts that reached a certain loss threshold defined by exchanges.
As prices have plunged significantly across the crypto sector within this last day, it’s no surprise that the vast majority of these liquidations involved bullish positions, indicating a widespread sentiment that expected an upward trend.
From the analysis of recent events, it is clear that about $1.22 billion in liquidations were attributed to long positions, making up a staggering 89% of the total. This immense figure implies that many traders were anticipating a rebound and leveraged their positions accordingly, but they found themselves on the wrong side of the market trend.
Bitcoin and Ethereum were at the forefront, incurring $404 million and $355 million in liquidations, respectively, reinforcing the high stakes involved in this volatile environment.
Meanwhile, Solana led the altcoins in liquidations, suffering $156 million, significantly greater than XRP’s $32 million. Solana’s price action, experiencing an 8% decline in the past day, underscores its vulnerability in today’s extreme market conditions.
This event has been categorized as a long squeeze, a term used when a mass liquidation occurs primarily among long positions. Such tumultuous occurrences are not unheard of in the crypto space, especially given its notorious volatility and the prevalence of overleveraged positions. However, events of this magnitude are relatively rare.
As the dust settles from this $1.4 billion liquidation event, the impending question is how traders and markets will adjust to the current landscape, which is still shrouded in uncertainty and volatility.
