The crypto market experienced a significant recovery in the past 24 hours, leading to over $300 million in liquidations. This surge in liquidation volume was primarily driven by the favorable ruling in the important Ripple lawsuit, which triggered a massive rally across the industry.
Crypto Short Traders Bear the Brunt
The majority of traders who faced losses in this liquidation wave were short traders, who had bet on prices falling rather than recovering. According to data from Coinglass, out of the total liquidations, short traders accounted for $219 million, while long traders contributed only $82.74 million. This means that short traders constituted 70.33% of all liquidations during this period.
In addition, over 86,000 traders saw their positions liquidated in the past day, with the largest liquidation occurring on the Bitmex exchange. This position was valued at $2.82 million and took place across the XRPUSD pair on the exchange.
Surprisingly, XRP traders claimed the second-highest liquidation volume, surpassing Ethereum. XRP traders experienced a total of $62.17 million liquation within the 24-hour period.
What’s Next for Liquidations?
The liquidations were primarily influenced by the price volatility caused by the Ripple lawsuit outcome. As the market stabilizes and prices settle, the liquidation volumes are expected to decrease unless there is a trigger for another rally or crash that would result in more liquidations.
Currently, Bitcoin, Ethereum, and XRP are holding onto their gains from the previous day. Bitcoin is priced above $31,000, Ethereum is trading slightly below $2,000, and XRP continues to see a 60% increase, with its price at $0.779 at the time of writing.
What caused the surge in liquidations in the crypto market?
The surge in liquidations was a result of the favorable ruling in the Ripple lawsuit, which sparked a major rally across the industry.
Which type of traders experienced the most losses in these liquidations?
Short traders, who had bet on prices falling, bore the brunt of the losses in this liquidation wave.
Are liquidation volumes expected to decrease in the future?
If the market remains stable without any significant triggers for rallies or crashes, liquidation volumes are likely to decrease. However, future market events can always lead to more liquidations.