The cryptocurrency market faced significant pressure as total liquidations reached $1.16 billion amid unexpected global events and the impact of inflation data from the US.
Overview of Market Liquidations
The crisis in the crypto market is a reaction to increased geopolitical risks and unpredictable inflation rises in the US. Major losses were suffered by cryptocurrencies like Bitcoin and Ethereum, which faced sharp price declines.
Where the Worst Losses Occurred
According to data, Binance faced the largest losses with liquidations amounting to $458 million, representing over 91% of long positions. Bybit also suffered considerable losses — $375 million, nearly 94% of long positions. Other exchanges such as OKX and Gate lost more than $125 million, demonstrating the scale of trader losses.
Impact of Liquidations on the Market
Liquidations induce a chain of sell-offs, and when combined with leveraged positions and market volatility, the consequences can be devastating. Approximately $20 million in liquidations occurred within the first hour of negative news, while nearly $1 billion was lost in just 12 hours. Risk management tools are becoming crucial for protecting positions in such an unstable market.
The $1.16 billion liquidation event highlights the high risks associated with leveraged trading in such a sentiment-driven market. In light of the uncertainty caused by inflation and geopolitical tensions, traders must prioritize risk management.
