In the past 24 hours, the cryptocurrency market witnessed a liquidation of contracts amounting to 359 million USD, with significant pressure particularly on long orders.
Of which, Bitcoin and Ethereum are the two cryptocurrencies suffering the largest liquidation losses, each with nearly 115 million USD, reflecting strong volatility and high risk in the derivatives market.
MAIN CONTENT
The volume of cryptocurrency contract liquidations in the past 24 hours reached 359 million USD.
Long liquidations overwhelmingly accounted for 276 million USD.
Liquidations of Bitcoin and Ethereum are nearly equivalent, at 115 million USD and 114 million USD, respectively.
What is cryptocurrency contract liquidation and what are its impacts?
Information from the Coinglass analysis platform shows that contract liquidation occurs when participants do not have enough margin to maintain their positions, resulting in the exchange automatically closing the orders. This is a sign that the cryptocurrency market is experiencing significant volatility and poses high risks.
According to the report, the total liquidation amount in the past 24 hours reached 359 million USD, of which most were long liquidations, indicating that many investors' expectations for a bullish trend were unsuccessful.
How are Bitcoin and Ethereum affected in this liquidation event?
Of the 359 million USD liquidated, Bitcoin accounted for 115 million USD while Ethereum accounted for 114 million USD. This reflects nearly equivalent volatility levels between the two most important cryptocurrencies, indicating similar risk allocation and capital flows.
"Large-scale contract liquidations like this are a clear indication of strong volatility in the current period, requiring investors to heighten vigilance and have effective risk management strategies."
Mr. Nguyen Van Hung, Market Analysis Director, June 2024
What does the liquidation ratio between long and short positions reflect?
Aggregated data indicates that 276 million USD belonged to liquidated long orders, accounting for over 76% of the total. Meanwhile, short orders were liquidated for about 82 million USD. This shows that most investors betting on the bullish trend have been swept along with the market's correction or price decline.
The pressure of liquidation focuses on long positions, often reflecting a market phase of reversal or deep correction, causing many users to be unprepared or have overly high expectations to be swept out of the market.
How can investors minimize liquidation risk when trading cryptocurrency derivatives?
Experts and market analysis reports recommend that investors should apply a comprehensive risk management strategy, including using stop-loss orders, reasonable portfolio allocation, not using excessive leverage, and frequently monitoring market price fluctuations.
In addition, utilizing volatility alert tools and conducting technical price analysis will help mitigate losses when the market fluctuates unexpectedly.
"Consider risk management as a priority, not only to protect capital but also to maintain a long-term position in the highly volatile cryptocurrency market."
Ms. Le Thi Mai, derivatives investment expert, May 2024
Comparison table of BTC and ETH liquidations in the past 24 hours
Cryptocurrency Total Liquidation (million USD) Liquidation Ratio in Total (%) Bitcoin (BTC) 115 32.0 Ethereum (ETH) 114 31.8
Frequently Asked Questions
What does liquidation of cryptocurrency contracts mean?
Liquidation is the automatic closure of positions by the exchange due to insufficient margin in the account, aiming to protect the capital safety of the parties involved in derivatives trading.
Why are long orders liquidated more than short ones?
Often due to significant price declines, long orders suffer losses and fail to maintain margin, leading to more liquidations than short orders.
How to avoid liquidation when trading futures contracts?
Applying good risk management, not using high leverage, placing stop-loss orders, and closely monitoring the market helps reduce the risk of liquidation.
Do large liquidations of Bitcoin and Ethereum have any impact on the market?
When both major coins are heavily liquidated, the market usually experiences large fluctuations, creating panic among investors or opportunities for those with clear strategies.
Where is the liquidation information updated from, and how reliable is it?
Data from a detailed analysis platform with sources from many major exchanges ensures accuracy and transparency for investors to follow.
Source: https://tintucbitcoin.com/thanh-ly-tien-dien-tu-359-trieu-usd/
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