The crypto market has suffered a massive loss, with $900m wiped out in the last 24 hours, according to Coinglass on Monday.
Long positions accounted for $764m of the liquidations, while short positions made up $124m, according to the report.
The liquidations highlighted the risks traders face when trading on unregulated Bitcoin derivative exchanges, where positions can be aggressively closed by the exchange’s risk engine when they reach the liquidation price.
According to the report, while a small number of liquidations may have a limited impact on the market, the simultaneous liquidation of thousands of positions can significantly move prices, triggering a “cascading effect” that may liquidate additional surrounding positions.
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However, Bitcoin’s price took a further hit on Monday morning, dipping to $53,000 on Binance, its lowest level since late February this year.
Also, Coinglass noted that the cryptocurrency’s decline is attributed to a combination of factors, including uncertainty in the US economy, investor withdrawals, and increased market turbulence.
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