Cryptocurrency Sector Experiences Significant Liquidations as Bitcoin and Other Digital Assets Continue to Show Volatility
- DDDOriginal
- 2024-09-20 18:46:29519browse
Following news of the US Federal Reserve's decision to cut back on interest rates, Bitcoin made a considerable recovery, climbing above the $63,000 mark.
As Bitcoin and other digital assets continue to display volatility, data shows that the cryptocurrency sector has faced significant liquidations.
The news of the US Federal Reserve cutting back on interest rates helped propel Bitcoin to a strong recovery, rising above the $63,000 level. Notably, Bitcoin's performance in the last 24 hours has been impressive, showcasing a remarkable 5% surge, bringing it closer to the highest levels seen in August.
This positive momentum in Bitcoin has had a beneficial impact on the wider cryptocurrency market. Several altcoins, including Solana (SOL) and Avalanche (AVAX), have outperformed Bitcoin, contributing to the broader market surge.
However, this market volatility has created turbulence in the derivatives sector, leading to extensive liquidations. According to CoinGlass data, the cryptocurrency derivatives market saw $201 million in liquidations over the past 24 hours. In this context, “liquidation” refers to the mandatory closure of an open contract once a specific loss percentage is reached.
The figures show that short contracts dominated these liquidations, accounting for about $147 million, which is nearly three-fourths of the total. This trend is to be expected, considering the significant price increases for Bitcoin and other assets during the period.
Such mass liquidation events, often known as “squeezes,” are relatively common in the highly speculative and volatile world of cryptocurrencies. The recent surge resulted in a “short squeeze,” where short investors were forced to close their positions.
Breaking down the liquidations by individual digital assets, Bitcoin led the way with $78 million in liquidations, more than double the $36 million registered by Ethereum, which came in second. Solana followed, with $11 million in liquidations, trailing behind the leading two.
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