Bitcoin ($BTC) surged above $81,000 following comments from Federal Reserve Board member Christopher Waller suggesting interest rates could remain unchanged at the September meeting, triggering massive liquidations in the cryptocurrency derivatives market. Leveraged trades held by investors taking positions against the rise were rapidly closed, with $334.6 million worth of positions liquidated in just the last four hours.
According to liquidation data, approximately $301.16 million of the aforementioned $334.6 million consisted of short positions. The amount of liquidations in long positions remained at $33.44 million. Thus, approximately 90% of the liquidations that occurred in the four-hour period came from investors expecting a decline in Bitcoin and altcoins.
Data from the last hour also showed that pressure on short positions continued. During this period, a total of $60.36 million in leveraged trades were liquidated, with $52.40 million of that being short positions and $7.96 million being long positions.
Nearly $510 Million Worth of Positions Liquidated in 24 Hours
Looking at the broader timeframe, the cryptocurrency market saw a total liquidation of $509.89 million in the last 24 hours. Of this amount, $415.56 million was accounted for by short positions, while $94.33 million was liquidated from long positions.
In the last 12 hours, the total amount liquidated reached $382.31 million. During this period, $329.71 million was wiped out from short positions and $52.60 million from long positions.
The data shows that the recent upward movement caught investors, especially those using high leverage in the short position, off guard.
One Single Bitcoin Liquidation Worth $174 Million
Bitcoin accounted for the largest share of liquidations in the four-hour period. Approximately $174.15 million worth of $BTC positions were liquidated in the last four hours, while Ethereum (ETH) liquidations reached $73.29 million.
Approximately $10.79 million in Solana (SOL) and approximately $7.83 million in XRP liquidations were recorded. Thus, Bitcoin and Ethereum accounted for the majority of the total liquidations in the four-hour period.
Bitcoin’s rise of over 4% in the last 24 hours, pushing it above $81,000, may have accelerated the price movement by causing a series of short positions to be closed. The buying of Bitcoin from the market during the forced closing of leveraged short positions can contribute to the acceleration of the rise through a mechanism known as a “short squeeze.”
The decline in expectations for a Fed rate hike following Waller’s remarks also played a significant role in market movement. According to CME FedWatch data, the probability of a rate hike at the September meeting fell by approximately 15 basis points to 48.4%, while keeping rates unchanged once again became the market’s base scenario.
*This is not investment advice.
Leave a Reply
You must be logged in to post a comment.