- Around $1.7 billion leveraged crypto trades, consisting of $1.62 billion longs and $83.59 million shorts, were rekt in the last 24 hours on the way to Monday morning.
- The founder of 10x Research warned that the continuously thinning liquidity in the crypto market amid the influx of leveraged trades could risk further downside in prices.
Over $1.7 billion leveraged positions snapped, triggering a significant drop in the prices of leading cryptocurrency assets on Monday morning (UTC). An expert warns that prices may continue to dip if liquidity fails to build up.
Crunching Down the $1.7B Rekt Crypto Positions
The latest bloodbath in crypto has led to the top market cap digital assets losing their key support. According to Coinglass, the cascading liquidations left $1.7 billion leveraged positions being wiped out 24 hours before 7:00 AM today. The wreckage comprised $1.62 billion long positions against $83.59 million shorts.
Ethereum (ETH) had the largest share in the wipe-out, accounting for the liquidation of $478.5 million longs and $16.7 million shorts. Bitcoin (BTC) followed with $277.13 million longs and only $6.67 million shorts. Meanwhile, XRP just relinquished its third spot at the crypto rankings back to Tether (USDT) as it bled $78.09 million longs and $851.63K shorts.
Additionally, the crypto futures trading and information platform revealed that the massive market liquidations affected over 406,200 traders. It noted that the largest single settlement occurred on OKX under a BTC-USDT swap worth $12.74 million.
What Happened?
Markus Thielen, former Head of Research & Strategy at Matrixport and founder of 10x Research, claimed they have seen the events gradually playing out before the weekend. This came despite the US Federal Reserve’s interest rate cut last week, which catalyzed optimism for the anticipated altseason.
Bitcoin dipped to its lowest since mid-August at $112K, and Ethereum slumped to $4,142. On the other hand, XRP dived to $2.78, which was near its lowest since the start of August.
Thielen explained that the writing has been on the wall amid the thinning trading volume and on-chain activity in the market. It coincided with their expected one- to two-week consolidation past the recent Federal Open Market Committee (FOMC) meeting that dropped interest rates to 4%-4.25%.
The expert pointed out that leveraged longs became increasingly vulnerable as liquidity thinned, raising the risk of breaks in key support zones of major crypto assets. The trend was also inherent in the string of short rallies, almost followed by extended consolidations, in the past couple of months.
Without significant liquidity injection, Thielen foresees a continuation of the pattern as traders continue to bet on high-leveraged positions.
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