Crypto Futures Record $1 Billion in Liquidations as Bitcoin Nosedives and Ether Slumps Since 2021

As ETH had its greatest single-day decline since May 2021, a mood index tracking cryptocurrency markets shifted to “fear” early Monday

• Bitcoin and ether values plummeted, with ether having its worst single-day decrease since May 2021, and the crypto fear and greed index showing “fear.”
• Crypto-tracked futures experienced almost $1 billion in liquidations in the last 24 hours due to a market sell-off, with ether futures seeing $304 million in liquidations.
• Over 200,000 traders were liquidated, with the highest single liquidation order being $27 million on Huobi.

Crypto-tracked futures saw almost $1 billion in liquidations in the last 24 hours, as the market sell-off escalated on Sunday. The massacre was fueled by a stronger Japanese yen and speculations that market maker Jump Trading was liquidating its cryptocurrency company.

According to statistics, Ether (ETH) monitored futures reported over $340 million in liquidated bets, with bitcoin futures losses totaling $420 million. Futures trading Solana’s SOL, dogecoin (DOGE), xrp (XRP), and pepe (PEPE) saw a combined liquidation of $75 million.

Over 275,000 individual traders were liquidated, with the highest single liquidation order occurring on the cryptocurrency platform Huobi – a BTC/USD deal worth $27 million. According to the statistics, around 87% of all impacted traders were long traders, meaning they gambled on increased prices.

Bitcoin (BTC) fell more than 11% in 24 hours, while ether dropped up to 25% before rebounding marginally. TradingView statistics reveal that this was the worst single-day price drop for ETH since May 2021, when prices fell from more than $3,500 to $1,700. TradingView’s daily candle shows the performance from UTC 00:00 to 23:59.

The dip led the popular cryptocurrency fear and greed mood index to display “fear,” the lowest level since early July. The index monitors volatility, pricing, and social media activity to determine if people are fearful—typically a hint of local bottoms—or greedy, which indicates market tops.

Bitcoin Fear and Greed Index is 26 — Fear
Current price: $58,110 pic.twitter.com/ZsB4p6MEix

— Bitcoin Fear and Greed Index (@BitcoinFear) August 5, 2024

Liquidations occur when an exchange forcibly terminates a trader’s leveraged position due to a partial or complete loss of the trader’s initial margin. It occurs when a trader is unable to fulfill the margin requirements for a leveraged position, which means they do not have sufficient cash to keep the transaction open.

Crypto markets began to fall last week, owing to geopolitical concerns in the Middle East and disappointing earnings reports from technology companies. These reasons lowered investor enthusiasm for artificial intelligence (AI) and caused a flight away from hazardous assets.

The slump deepened early Monday as the yen jumped to seven-month highs on rising anticipation of more rate rises by the Bank of Japan and the unwinding of carry trades. Tokyo’s Topix 100 index fell to its lowest level since 2011.