Crypto Futures Face $840M in Liquidations as Bitcoin Plummets and Ether Sees Largest Drop Since 2021

August 04, 2024 11:53 PM AEST | By Team Kalkine Media

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Crypto Futures Face $840M in Liquidations as Bitcoin Plummets and Ether Sees Largest Drop Since 2021 — Image source: Shutterstock

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Highlights:

The market sell-off led to over $840 million in liquidations for crypto-tracked futures in the past 24 hours, with (Ether) (ETH) futures alone accounting for $304 million.

More than 200,000 traders faced liquidations, including the largest single order worth $27 million on the Huobi exchange.

(Bitcoin) (BTC) and (Ether) (ETH) prices saw significant declines, with Ether experiencing its worst single-day drop since May 2021, while the crypto fear and greed index signaled "fear."

Crypto-tracked futures saw over $840 million in liquidations in the past 24 hours as the market sell-off intensified on Sunday. This downturn was driven by a stronger Japanese yen and rumors that market maker Jump Trading is liquidating its crypto holdings.

Ether (ETH) futures experienced over $304 million in liquidations, surpassing bitcoin (BTC). Solana (SOL), dogecoin (DOGE), XRP (XRP), and pepe (PEPE) futures collectively faced $75 million in liquidations.

More than 200,000 traders were liquidated, with the largest single order on Huobi involving a BTC/USD trade worth $27 million. About 87% of these traders had long positions, betting on higher prices.

Bitcoin dropped over 11% in the past 24 hours, while ether plunged up to 25% before a slight recovery. This marked the worst single-day drop for ETH since May 2021. The crypto fear and greed sentiment index hit its lowest level since early July, indicating "fear."

Liquidations occur when exchanges close a trader's leveraged position due to insufficient margin. The sell-off began last week due to geopolitical tensions in the Middle East and disappointing tech earnings, dampening AI hype and prompting a move away from risky assets.

The situation worsened as the yen surged to a seven-month high, driven by expectations of further rate hikes by the Bank of Japan and the unwinding of carry trades. Tokyo’s Topix 100 index saw its largest drop since 2011.

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