Data shows that the crypto derivatives market has seen a huge wave of liquidations after Bitcoin, Ethereum, and other assets took a sharp downturn.
Bitcoin and Ethereum Are Both Down More Than 5% Over the Past Week
The second half of May has reversed the earlier trend in the cryptocurrency market, and things don’t seem to be improving as the month ends. Over the last 24 hours, Bitcoin and other digital assets have dropped again, wiping out weeks of gains.
Related Reading: XRP Flashes TD Sequential Buy Signal, Analyst Eyes Rebound
As the chart below shows, Bitcoin has fallen back to around $73,400 after dropping 3.3% in the past day. At its lowest point during this decline, Bitcoin briefly slipped below $73,000—something that hasn’t happened since early April. Although the coin has recovered a bit, it’s still down more than 5% for the week.
Ethereum has fared even worse, losing over 6% in the same period. It’s now trading around $1,990, its lowest level since late March. Other cryptocurrencies have also seen losses, with some like ZCash dropping more than 8% in just the last 24 hours.
This volatility has caused chaos in the derivatives market.
Crypto Market Liquidations Have Hit $930 Million
According to data from CoinGlass, a large number of cryptocurrency liquidations have taken place on derivatives exchanges over the past day. A “liquidation” happens when an open contract is forcefully closed after losing a certain percentage of its value, as set by the platform.
The table below breaks down the latest liquidation numbers. As you can see, the derivatives market has seen a total of $928.8 million in liquidations over the last 24 hours. While big sell-offs aren’t unusual in the volatile crypto market, this one stands out for its intensity.
Most of the price movement during this period has been downward, so it’s no surprise that bullish bets made up the vast majority of liquidations—$869.3 million.
Looking at individual assets, Bitcoin and Ethereum were the biggest contributors, as usual. The data shows that Bitcoin-related contracts saw $365.1 million in liquidations, while Ethereum contracts saw $242 million. The next largest coin, Solana, had just $26 million in liquidations—a huge drop-off.
Related Reading: Chainlink Whales Are Accumulating: Wallets Hit New All-Time High
This wave of long liquidations wasn’t entirely unexpected, as highly positive funding rates had already pointed to a market heavily tilted toward bullish positions.
Featured image from Dall-E, chart from TradingView.com
Frequently Asked Questions
Here is a list of FAQs about the nearly 1 billion in crypto liquidations following the Bitcoin and Ethereum crash written in a natural tone with clear simple answers
BeginnerLevel Questions
1 What exactly is a liquidation in crypto
Its when a trading platform forcefully closes your position because you dont have enough funds to cover your losses Think of it like a margin call if your bet goes bad and your money runs out the exchange sells your assets to pay back the loan you took
2 Why did Bitcoin and Ethereum crash so suddenly
Crypto prices often drop fast when theres a mix of bad news panic selling and a cascade of liquidations When prices fall more traders get liquidated which forces more selling creating a snowball effect This time a combination of macro economic fears and a large sell order triggered the domino effect
3 How does a 1 billion liquidation happen
It adds up quickly When Bitcoin drops by 10 thousands of traders who used borrowed money get wiped out at once The total value of all those forced selloffs in a 24hour period reached nearly 1 billion
4 Does this mean Ill lose my crypto if I just own Bitcoin in a wallet
No If you bought Bitcoin directly and hold it in your own wallet you dont get liquidated You just see the price go down Liquidations only affect people trading on margin or using futuresleverage
5 Should I sell my crypto right now
That depends on your personal risk tolerance Crashes can be scary but selling in a panic often locks in losses Historically crypto has recovered from big crashes but there are no guarantees Never invest more than you can afford to lose
Intermediate Advanced Questions
6 What is leverage and how does it cause these massive liquidations
Leverage lets you trade with borrowed money For example with 10x leverage a 10 drop wipes out your entire investment When thousands of traders use high leverage a small price dip can trigger a chain reaction of forced sells amplifying the crash
7 How do liquidations affect the price even more
When a trader is liquidated their collateral Bitcoin or Ethereum