92% of all crypto ‘longs’ liquidated yesterday after Bitcoin fell to $43,000

The crypto market saw one of its biggest moves in recent times, with over 376,000 trading accounts ‘liquidated.’

Crypto traders took some of their biggest hits in recent times as a sudden purge across the crypto market saw $3.7 billion worth of trading positions liquidated, data from multiple sources showed.

‘Liquidations,’ for the uninitiated, occur when leveraged positions are automatically closed out by exchanges/brokerages as a “safety mechanism.” Futures and margin traders—who borrow capital from exchanges (usually in multiples) to place bigger bets—put up a small collateral amount before placing a trade.

In traderspeak, ‘longs’ occur when investors are betting on prices of a certain asset to rise, while ‘shorts’ occur when they are betting against that asset. 

Who got hit and where?

Yesterday’s purge, unsurprisingly, meant $3.42 billion worth of longs alone were liquidated—accounting for over 92% of all crypto futures positions.

Of those, degen platform Bybit took on $1.3 billion worth of liquidations alone. It was followed by Huobi ($836 million), Binance ($795 million), OKEx ($400 million), and Deribit ($115 million).

Overall, $1.4 billion worth of Bitcoin positions were liquidated, $928 million worth of Ethereum positions were liquidated, and $223 million worth of XRP positions were liquidated. These were followed by Solana, Cardano, and Dogecoin, which each saw $98 million, $84 million, and $80 million worth of liquidations respectively, as data from on-chain analytics tool Bybt shows.

Alameda Research co-CEO Sam Trabucco pointed out the move was almost like clockwork in a tweet, stating similar data in futures premia and open interest preceded the previous crypto crash.

“The set-up is the same every time: futures are at really high premia; this suggests aggressive buying, OIs going up; this suggests the buyers are opening positions, number go up: this means there’s *net* buying,” he said, adding:

“And “number go up” important sets up the opportunity for people to buy at “high” prices. This matters because of the next stage of the set-up: – number go down”

All in all, over 376,000 individual trading accounts were affected by the carnage, ranging from exchanges from Binance to FTX, to Bitfinex. A move of such intensity was previously seen in early-2021 as Bitcoin and other cryptos reached their all-time highs—coming as a sudden shock for some.

Leave a Reply