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The Great Ethereum Liquidation: When Long Traders Gambled and Lost

The Ethereum price plummeted on Monday due to the Ethereum Foundation selling coins, leading to significant losses for ETH traders. Ethereum's liquidation volumes surpassed $32 million, with the majority coming from long traders. Ethereum also had the largest single liquidation event, outperforming Bitcoin in liquidation volumes. Over 20,500 crypto traders suffered losses, totaling $56.42 million, with the Binance exchange seeing the highest volumes. If there are more significant price swings, liquidation volumes are expected to persist. Stable trading ranges would keep the volumes low.

Our analysis of the situation

The Ethereum price took an unexpected nosedive on Monday, catching many traders off-guard. Reports have emerged that the Ethereum Foundation started selling coins, causing a ripple effect that triggered a series of liquidation events. In the aftermath, ETH traders found themselves counting their losses and nursing wounded portfolios.

Crossing the $30 Million Liquidation Mark

By Tuesday, October 10, the Ethereum liquidation numbers skyrocketed, surpassing a staggering $32 million. To no one's surprise, long traders bore the brunt of the losses, with Coinglass data revealing that a whopping 87.61% of all ETH liquidation volumes came from their positions.

Of the $32 million in liquidation volumes recorded in the past day, an astounding $29.56 million were from long positions, leaving only $2.91 million in short positions liquidated—a harsh reminder of the risks involved in trading.

Ethereum's Big Bang: The Largest Single Liquidation Event

Ethereum's plunge also secured it the crown for the largest single liquidation event within the 24-hour time frame. The trade in question took place on the popular Binance crypto exchange, specifically across the ETHBUSD pair. The liquidation, which amounted to a staggering $4.53 million, underscored the magnitude of the losses incurred.

Surpassing Bitcoin: Ethereum Takes the Lead

To add more fuel to the fire, Ethereum's liquidation volumes for the same time period outpaced those of Bitcoin. Bitcoin has long been the frontrunner in triggering liquidation events, but this time, Ethereum stole the spotlight. Bitcoin's 24-hour liquidation volumes amounted to $19.28 million, overshadowed by Ethereum's $32.48 million. However, similar to ETH, long traders accounted for the vast majority of the liquidation volumes for BTC.

Over 20,500 Crypto Traders Bite the Dust

Although the liquidation volumes witnessed in the last 24 hours may not have shattered any records, they remain a significant event in the cryptocurrency market. According to CoinGlass data, a total of 20,525 crypto traders felt the sting of liquidation, amounting to a combined loss of $56.42 million.

Within this figure, long traders bore the brunt, facing losses of $44.9 million, while short traders incurred $11.48 million in losses. Apart from Bitcoin and Ethereum, other notable assets that experienced liquidation volumes were Bitcoin Cash (BCH) with $3.59 million, XRP with $2.77 million, and Solana (SOL) with $2.75 million.

The Exchange Showdown: Binance Takes the Lead

When it came to facilitating the largest liquidation volumes, Binance emerged as the unambiguous winner, accounting for $24.86 million. OKX followed closely with $17.16 million, while ByBit reached $6.90 million. In fourth place was Huobi with $5.8 million, and the CoinEx exchange rounded off the top 5 with $1.05 million.

Liquidation Volumes: The Rollercoaster Continues

If wild price swings persist as witnessed on that fateful Monday, it is likely that liquidation volumes will remain a cause for concern. However, should the market find stability and assets trade within a tighter range, these volumes may witness a decline. Until then, traders should brace themselves for the unpredictable twists and turns that make the cryptocurrency world both thrilling and treacherous.

Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Image(s) are provided by LoremFlickr and/or other free sources. They are illustrative and may not represent the content exactly.

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