• Crypto Futures Market Has Seen Liquidations Of Around $236 Million In Last 24 Hours
• Leverage combined with the general volatility of the coins means that uninformed trading can be quite risky in the market, which is why large liquidation events take place frequently.
• CoinGlass data shows over 72,500 traders have been liquidated during the last 24 hours.
Crypto Future Market Sees Liquidations Of $236 Million
The cryptocurrency market has seen liquidations amounting to nearly $236 million as Bitcoin has plummeted to $29,300 today. A “liquidation” occurs when a futures contract holder’s bet fails and the price moves in the loss direction just enough that a certain percentage of the margin (the initial collateral) is drained, leading to the derivative exchange to forcibly close or “liquidate” the position.
Risk of Liquidation Increases With Leverage
One factor that significantly increases risk of a contract getting liquidated is degree of leverage used by investor. Leverage here refers to loan amount that’s often many times initial position itself. While this magnifies profits if it works out, losses are also magnified by same degree when it doesn’t go according to plan. Mass liquidations taking place within short span of time aren’t an uncommon sight in crypto market due to sharp volatility and accessibly high leverage amounts like 50x – 100x on some platforms.
CoinGlass Data Shows 72,500 Traders Liquidated
Below is table from CoinGlass showing data related to last 24 hour period:
High Risk Trading Can Lead To Large Liquidations Events
High leverage combined with general volatility of coins means that uninformed trading can be quite risky in crypto market, which why large liquidation events take place frequently. Investors should exercise caution when deciding how much leverage they want use for their trades as this will determine how much risk they are exposed too if things don’t go according to plan.
In conclusion, mass liquidations are not uncommon in cryptocurrency markets due to extreme volatility and accessibly high levels of leverages available on some platforms. This can lead large liquidation events where investors may lose significant amounts money if prices move against them before positions closed out. It’s important investors understand potential risks before entering trades so they can make informed decisions about how much leverage they’re comfortable using for their positions