Bitcoin Volatility Induces $700 Million Crypto Futures Destruction

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Data shows that the cryptocurrency futures market saw liquidations worth $700 million in the last day as Bitcoin experienced its volatility.

Bitcoin has seen intense price action in the last 24 hours

The previous day was something of a rollercoaster for Bitcoin, as the asset saw strong price action in both directions but ended up rising as the bulls won.

However, this rally, which is the peak of the year so far, only lasted briefly as BTC fell sharply below the $59,000 mark. The asset has since recovered to higher levels and is now sitting at around $62,700.

The rest of the cryptocurrency sector has also seen its share of volatility, with prices fluctuating between currencies. As is often the case with such sharp price movements, the futures market has seen a lot of selling.

The crypto futures market suffered a contraction in the last day

According to data from CoinGlass, the cryptocurrency futures market witnessed the liquidation of contracts worth over $700 million in the last 24 hours.

It appears that only $131 million in settlements occurred in twelve hours, suggesting that most of the flow occurred in the previous half-day period. This makes sense, as Bitcoin was more volatile in this window.

It also appears that the long-short ratio in this liquidation event was quite balanced, although the price increased on the last day. This would suggest that aggressive shorting occurred when Bitcoin approached $64,000 and the subsequent pullback eliminated these large buyers.

As is often the case, Bitcoin futures contracts were once again responsible for the majority of total market liquidations, contributing around $270 million.

What is different this time, however, is that this proportion, although the largest, does not represent even half of the total settlements. This could be due to the fact that speculators may now be playing altcoin positions after gaining confidence from the rising BTC price.

Dogecoin, the best-performing coin among major coins with its 34% jump, captured the largest share among alts with nearly $51 million in liquidations.

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