Bitcoin (BTC) and ether (ETH) futures traders posted some of the biggest losses in more than a month as prices moved below support levels in the past two days – and collapsed from a period of stagnation.
Bitcoin fell to just below $28,500 late Wednesday, marking one of the biggest two-day price declines since mid-June. Bitcoin’s weakness caused major altcoins such as ether, XRP, and solana (SOL) to follow suit, dropping as much as 5%.
Liquidations in the futures contracts that track the major tokens crossed the $160 million mark in the past 24 hours, prompting losses of more than $320 million since the start of this week. These losses come amid one of the lowest periods of volatility for bitcoin.
Bitcoin futures posted nearly $50 million in losses, followed by ether at $22 million and litecoin (LTC) at $5 million. Bitcoin Cash (BCH), Solana, and XRP traders suffered nearly $4.5 million in losses each.
Coinglass data shows that long positions, or bets on high prices, made up 90% of all liquidations.
Liquidation occurs when an exchange aggressively closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position or fails to have sufficient funds to hold the position open.
Large liquidations can signal above or below local price action, which may allow traders to position themselves accordingly.
Open interest, or the number of unsettled contracts, rose 1.16%, which means traders opened more positions but ultimately used significantly less leverage – indicating a lower risk sentiment.
Meanwhile, trading firm QCP Capital said in a Telegram broadcast earlier this week that it expects prices to gradually decline in the immediate absence of market catalysts. She added that price levels between $24,000 and $26,000 for bitcoin can be expected in the coming months.
