Bitcoin (BTC) and ether (ETH) prices plummeted on Aug. 18, with the two cryptocurrencies hitting 2-month lows and triggering a series of liquidations for thousands of derivatives traders.
The cryptocurrency carnage resulted in the liquidation of hedge positions worth billions of dollars, with several traders losing millions on a single trade.
According to data from Coinglass, a total of 176,752 traders were liquidated in the past 24 hours. Ninety percent of these liquidations occurred in the past 12 hours, showing a rapid rise in price volatility just days after BTC and ETH posted their lowest daily volatility in years.
Among the large number of traders who lost large derivatives positions, two exceptional liquidations caught the attention of the cryptocurrency community due to their sheer size. During the price crash, an investor in Binance’s ETHBUSD contract was liquidated at $1,434.37, losing $55.9211 million, making it the largest liquidation of the day. Another Binance trader on BTCUSDT contracts lost nearly $10 million in liquidations.
related: Bitcoin speculators now own the least amount of Bitcoin since the all-time high of $69,000
The multibillion-dollar liquidation is the largest liquidation event in the cryptocurrency space in the past 8 months after the last such event during the FTX crash.
The price function of the cryptocurrency market is due to a variety of factors, including the SpaceX Bitcoin writedown, macroeconomics (BTC and ETH have been trading in a certain range for the past few months).
BTC held the key support level of $28,000 for several months, while ETH held the support level of $1,500 before capitulating yesterday. Liquidity in the cryptocurrency market has been low, with trading volumes on prominent cryptocurrency exchanges such as Coinbase plummeting.
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