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Data shows the cryptocurrency market has witnessed massive liquidations during the past day following the recovery Bitcoin and the altcoins have made.
Bitcoin & Altcoins Have Jumped Back Following Trump’s Announcement
Bitcoin and the rest of the cryptocurrency sector ended February on a very bearish note, as the market went through a deep drawdown that took BTC to as low as $78,000. In a flash, however, the digital assets have seen their fates flip during the past day.
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The impetus behind the recovery move has been Donald Trump’s announcement of a Crypto Strategic Reserve that includes Bitcoin, Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA).
The announcement came through the president’s official Truth Social handle. In the initial post, Trump only mentioned the altcoins XRP, SOL, and ADA, but in a follow-up post, he also confirmed BTC and ETH, saying they will be “the heart of the Reserve.”
Since the US elections, the Crypto Reserve has been something much-anticipated in cryptocurrency circles, so it’s not surprising that the news has been able to have a drastic effect on trader mood.
From the graph, it’s visible that Bitcoin approached the $95,000 level during the surge, but its price has since witnessed a small pullback to $92,800. Ethereum has displayed a similar pattern, although its retrace from $2,550 to $2,360 has been notably larger than BTC’s.
Overall, the top two cryptocurrencies are up 8% and 6% during the last 24 hours, respectively. Interestingly, XRP, SOL, and ADA, the three coins initially announced, have shown much stronger rallies of 17%, 13%, and 48%, respectively.
The bullish momentum hasn’t been restricted to just these five included in the Reserve, as coins across the space have observed some degree of rise. A consequence of all this volatility has been that liquidations have piled up on derivatives platforms.
Crypto Derivatives Market Has Just Seen $971 Million In Liquidations
According to data from CoinGlass, a total of $971 million in cryptocurrency derivatives contracts have found liquidation in the past day. “Liquidation” here refers to the forceful closure any open contract undergoes after it has amassed losses of a certain degree.
Below is a table that breaks down the relevant numbers related to the latest mass liquidation event.
As is visible above, around $558 million of these liquidations involved the short investors, representing over 57% of the total. These traders making up for the majority of the event is naturally expected, as the market has gone up inside this window. Though, despite the bullish action, around $412 million in long holders still got liquidated as a result of the pullback.
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In terms of the individual symbols, Bitcoin and Ethereum have predictably come out on top with $353 million and $182 million in liquidations, respectively.
Featured image from Dall-E, CoinGlass.com, chart from TradingView.com
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