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R1.9 billion in Bitcoin and Ethereum positions liquidated as the market falls

Data shows that more than R1.9 billion in Bitcoin and Ethereum futures have been liquidated in the last 24 hours. Both cryptocurrencies’ prices have dropped by 6% and 7%, respectively, wiping away the previous gains.

According to Coinglass data, Bitcoin futures alone lost R887 million, meaning that most trading activity and open interest were restricted to the most prominent cryptocurrency due to market capitalisation. Ethereum futures, on the other hand, lost R982 million.

When an exchange closes a leveraged position for a safety measure, a liquidation occurs. It occurs as a result of a partial or complete loss of the trader’s initial margin. This is most common in futures trading. Instead of spot trading, when traders hold the physical assets, this just tracks asset prices.

According to CoinMarketCap data, Bitcoin is currently down 5.85% on the day. It also implies that the main cryptocurrency, with a market capitalization of R8.6 trillion, has fallen 57.06% from its all-time high of R1 059 031.

Similarly, Ethereum, the second-largest cryptocurrency, has fallen 64.02% since its all-time high of R76 741 in November 2021. Nonetheless, ETH is struggling to maintain its recent strong momentum.

Reasons for Bitcoin and Ethereum Price Drops

The Crypto Fear & Greed Index measures market activity and determines if cryptocurrencies are priced properly. The Fear & Greed Index has a score of 15 out of 100, indicating that the market is experiencing “severe fear.”

First, trading activity in Ethereum and Bitcoin has decreased. According to DefiLlama data, the Total Value Locked (TVL) across multiple protocols in Ethereum has declined from R1.4 trillion to R1 trillion in the previous 24 hours.

According to Chainalysis data, the movement of Bitcoin to crypto exchanges is down 37.4%, indicating decreasing demand for BTC among investors.

Ethereum DeFi Protocols

TVL, or Total Value Locked, on Aave, Ethereum’s largest decentralized finance platform, has lost 15% of its value in the last month. Other high-profile initiatives, such as Curve Finance, MakerDAO, Lido, and Uniswap, also lost double-digits of TVL during the same time period.

With 55.59 % defi TVL, Ethereum is the most popular blockchain for decentralized apps (defi). This is due to the R1.6 trillion in value that has been locked into the ETH chain. Terra ranks second in terms of market share, with 12.86% and R360 billion locked in its blockchain. Binance Smart Chain (BSC) currently controls 6.37 % defi TVL, or R178 billion.

R1.9 billion in Bitcoin and Ethereum positions liquidated as the market falls

Nonhlanhla P Dube

Nonhlanhla P Dube is a senior news reporter at Rateweb. Nonhlanhla is a student of International Relations at the University of South Africa. She reports primarily on personal finance and economics. You can contact her directly by email at [email protected]

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