Bitcoin’s Minor Dip Triggers Major Liquidations, Exposing Overleveraged Traders
A slight dip in Bitcoin’s price on Friday morning sent shockwaves through the market, triggering a cascade of liquidations and highlighting the risks associated with high leverage trading. Over 100,000 traders saw their positions wiped out in a mere 24 hours, even as the percentage drop in Bitcoin’s value remained relatively small.
The total value of these liquidations soared past half a billion dollars, with Bitcoin accounting for $159 million and Ethereum for $118 million. The remaining liquidations were spread across various other cryptocurrencies.
Interestingly, the ratio of long to short liquidations stood at 4:1, suggesting that bearish traders were also caught off guard by the subsequent price rebound.
Bitcoin’s Brief Dip Exposes Leveraged Traders, Resulting in $505 Million in Liquidations
Bitcoin briefly touched $114,500 on Friday morning before recovering to $116,300. This represents a 7% decrease from its all-time high on the 14th and a 4% decrease from Thursday’s high.
Despite these relatively modest price movements, the impact on leveraged traders was significant. Over 100,000 traders were liquidated within 24 hours, primarily those holding long positions.
“In the last 24 hours, 131,362 traders were liquidated, with total liquidations of $505.15 million,” reported Coinglass. “The largest single liquidation order occurred on OKX, in the BTC/USDT pair, valued at $17.35 million.”
These figures indicate that a substantial number of investors are employing extremely high leverage, making them vulnerable to even minor price fluctuations.
One Trader Liquidated for $83.3 Million
While Coinglass identified the largest liquidation at $17.35 million, Lookonchain reported an even more staggering event: a single trader liquidated for $83.3 million on Hyperliquid, a decentralized exchange.
“AguilaTrades was liquidated again for 720 BTC ($83.3 million). After being down more than $35 million, recovering to a profit of $3 million, he is now back even deeper in the red, with more than $36 million in losses.”
Reportedly, this trader was using 20x leverage, meaning a mere 5% price movement against their position was enough to trigger the massive liquidation.
Despite the high number of liquidations, Bitcoin’s price chart doesn’t reflect extreme volatility.
The leading cryptocurrency is down 2.5% over the past 24 hours, while Ethereum has fallen by 2.1% during the same period.
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