Bitcoin had lost its footing above $20,000 earlier in the week, sparking uncertainty among investors who previously thought the price of bitcoin was in a recovery trend. This decline has led to more sales in the space, although to a lesser extent than previously. As the digital asset is now beginning another recovery trend, traders who had bet against its ability to advance are finding themselves in very unpleasant situations.
Bitcoin Short Traders Suffer Losses
Bitcoin had started to rally just after the CPI showed that the inflation rate in the United States had hit a new 40-year high. At 9.1%, it was the highest number on record since 1981, prompting investors to look to other alternatives to hedge their wealth against inflation. The result had been an influx of fresh money into the bitcoin market.
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The recovery had seen many traders who had bet against bitcoin suffer losses. Data from coin glass shows that in the past 24 hours, nearly $200 million in liquidations have been recorded and the majority of liquidations have come from short traders. In total, more than 57,800 traders were liquidated and at a percentage of 83.91%, more than 48,000 traders who bet against the recovery of the crypto market suffered losses.
BTC price recovers above $20,000 | Source: BTCUSD on TradingView.com
Even over time, liquidations have not diminished. In the past 12 hours alone, the number of liquidations has risen to more than 54 million. At the time of this writing, the last four hours had seen liquidations of $21 million and that should accelerate as the recovery continues.
Ethereum takes the lead
In most cases, when market sell-offs are calculated, bitcoin always takes the lead. However, that is not the case this time as another has taken the lead in liquidations. Ethereum’s rally over the past day had been just as dramatic as bitcoin’s and short traders were caught up in the wave.
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The second-largest cryptocurrency by market capitalization accounts for the majority of liquidations recorded over the past day. It saw over 72.64,000 ETH liquidated, amounting to over $90 million. Bitcoin, which usually leads the pack, only saw half the value of liquidations over the same period.
ETH liquidations ramp up | Source: Coinglass
The same is true on a 12-hour basis, although bitcoin is catching up in this regard. Ethereum continues to lead but with a much smaller margin.
Other cryptocurrencies that saw high liquidations over the past day include MATIC, SOL, and AAVE with $8.52 million, $5.93 million, and $2.81 million respectively.
Featured image from Financial Times, chart from TradingView.com
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