InfoNesia.xyz – Over one hundred thousand traders have lost their investment this week as the crypto market experience a drastic fall in price.
Crypto market sets another liquidation record
Liquidations in the crypto markets have risen to unusual levels lately amid a plunge in the value of many cryptocurrencies. The liquidation has affected different cryptocurrencies, with hundreds of thousands of traders across the globe falling victim.
According to Data from Coinglass, In the past 24 hours, 130,152 traders have been liquidated. The total liquidations come in at $238.54 million within the 24-hour time frame. The largest single liquidation order happened on Binance – BTCUSDT at a value of $3.76M.
Bitcoin recorded the highest liquidation at $71.23 million, followed by ETH at $67.24 million and Solana at $23.68 million within 24 hours, as recorded by CoinGlass. 57.48% of the total liquidation was recorded in short Positions.
The highest liquidation for the week was recorded on Tuesday 8th of November, at about $680 million of crypto liquidations, according to data from Coinglass. In comparison, liquidations on the previous Tuesday, the 1st of November, amounted to just $38 million. Over $660 million of liquidations occurred on Tuesday within 24 hours, Coinglass shows.
What is crypto liquidation?
Industry experts believe that digital currencies may positively impact the current financial system. Even so, cryptocurrencies are still prone to drastic price swings, which can open up several risks, such as liquidation.
Cryptocurrencies are known for their volatility. This makes them prime targets for liquidation. Liquidations occur when a crypto exchange or brokerage sells a trader’s position because they can no longer meet margin requirements. Many exchanges have mechanisms to kick-start automatic liquidations when a user’s margin trading position falls below a specific percentage of the original value.
Every market plunge leads to a higher-than-usual level of liquidations, so the current situation isn’t surprising. Liquidation levels may increase if the price slump continues or cool down if the crypto markets recover in the short term.
Crypto market yet to recover from FTX crash
The crypto market has suffered price slumps this week, fueled by the apparent insolvency of FTX, a top-five crypto exchange. FTX has been unable to fulfill withdrawals after customers rushed to remove $6 billion worth of tokens from the platform in 72 hours.
The saga began last week following a news report that Alameda Research, a trading firm with close ties to FTX, had $8 billion of liabilities on its books and most of its equity in FTT, a relatively illiquid token– FTT is the native token issued by the FTX exchange.
Shortly after the report, Binance, the biggest crypto exchange by trading volume and a major FTX rival, announced that it was selling all its FTT tokens, dragging the price considerably.