Crypto futures recorded more than $1 billion in liquidations in the past 24 hours amid weak market sentiment and the loss of key support levels.
Bitcoin (BTC) fell as much as 8% in the past 24 hours. Ether (ETH), Chain's BNB, and XRP posted similar losses. Terra's LUNA fell 50% as its UST stablecoin lost its peg to the U.S. dollar, while Memecoin Dogecoin (DOGE) relatively outperformed the market, falling only 6%.
Bitcoin temporarily fell below $30,000 in the early Asian hours, helped by a weak general market. The U.S. Nasdaq technology index ended Monday down 4.29%, while Asian markets began Tuesday down more than 1%.
This price action resulted in the largest liquidation losses so far this year. The data shows that traders of Bitcoin futures lost $346 million, Ether futures lost $321 million, and LUNA futures lost $87 million - a figure that is unusually high for traders of the asset.
Long traders, those betting on higher prices, accounted for more than $793 million of the total liquidations, representing 74% of futures trades. About $257 million of this was accounted for by crypto exchange OKX, followed by Binance with $181 million and FTX with $102 million.
Open interest, which is the number of outstanding derivative contracts that have not yet been settled, decreased by 5.6%, which means that traders closed their positions in anticipation of a further decline. This means that the crypto market has lost almost 8% of its total capitalization in the last 24 hours.
At the time of writing, the markets seemed to be gradually recovering. Bitcoin was trading above $31,800, while Ether was back at the $2,800 mark. However, an extended recovery would depend on how the broader equity markets perform this week, as market observers have already noted.