The liquidation volume of contracts in the cryptocurrency market over the past 24 hours reached 207 million USD, with Long positions accounting for a large part.
According to data from Coinglass, the total liquidation value of Bitcoin and Ethereum contracts is also quite significant, over 17 million USD and 90 million USD respectively, reflecting the dynamism and volatility in the cryptocurrency market.
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The total liquidation of cryptocurrency contracts in 24 hours reached 207 million USD.
Long position liquidations accounted for up to 158 million USD, significantly higher than Short.
Bitcoin and Ethereum contributed significantly to liquidation with over 17 million and 90 million USD respectively.
What is cryptocurrency contract liquidation and why is the figure of 207 million USD important?
According to market experts, contract liquidation occurs when investors lose their positions due to unfavorable price fluctuations, leading exchanges to automatically close positions to avoid greater risks. The figure of 207 million USD indicates significant pressure on the market over the past 24 hours, reflecting strong volatility.
This liquidation figure is a warning sign for traders about current liquidity and risk. According to Coinglass's report on July 20, 2024, this liquidation level is mainly concentrated in the cryptocurrency futures market, especially in long positions.
Specific analysis of the liquidation ratio between Long and Short positions
Data shows that Long position liquidations account for up to 158 million USD out of the total 207 million USD, about 76%. This demonstrates that many investors expect the market to grow, but the market moves contrary to their predictions.
"Liquidation of contracts clearly reflects the volatility and psychological pressure of investors in the cryptocurrency market," shared the CEO of a cryptocurrency investment fund (HN, July 2024).
Mr. Nguyen Van An, CEO of CryptoTech Investment Company, July 2024
In contrast, the Short position only accounts for over 49 million USD, indicating that investors choose the less risky short-selling strategy during periods of high volatility.
What roles do Bitcoin and Ethereum play in this contract liquidation?
Bitcoin and Ethereum are the two cryptocurrencies with the largest liquidation volumes, at 17 million USD and 90 million USD respectively, accounting for a large portion of the total liquidation. This reflects the central role and strong volatility of this duo in the market.
The fact that Ethereum has a larger total liquidation than Bitcoin indicates significant pressure from investment positions on this platform, especially when the Ethereum network popularizes many smart contracts and DeFi.
The increasing liquidation rate of Ethereum is explained by the rise of DeFi applications and smart contracts on the network," emphasized blockchain financial expert Tran Minh Tung in the July 2024 market report.
Tran Minh Tung, Blockchain Analysis Expert, Crypto Market Report, July 2024
Comparison table of Bitcoin and Ethereum liquidation in the past 24 hours
Cryptocurrency Type Total Liquidation Value (USD) Percentage of Total Liquidation (%) Bitcoin 17,056,400 8.23% Ethereum 90,130,900 43.52%
Factors affecting the large contract liquidation levels
Market analysts say that strong price fluctuations due to economic news, high leverage trading, and FOMO phenomena are the main causes of the liquidation of hundreds of millions of USD in a short time.
Furthermore, events such as policy changes, halving, or international market fluctuations also significantly impact liquidity and liquidation pressure on centralized and decentralized exchanges.
Frequently Asked Questions
What is cryptocurrency contract liquidation?
Liquidation occurs when investors lose the ability to maintain positions because price fluctuations render the collateral insufficient, leading to automatic position closures on exchanges.
How to minimize liquidation when trading cryptocurrency contracts?
Investors should manage risks tightly, reduce leverage, monitor the market, and use effective stop-loss orders to avoid sudden liquidations.
How do Long and Short positions differ in liquidation?
A Long position is buying with the expectation of a price increase; a Short position is selling with the expectation of a price decrease. Liquidation occurs when the market responds contrary to that position.
Why is the liquidation level of Ethereum greater than that of Bitcoin?
Ethereum has more DeFi contracts and DApps, resulting in higher trading pressure and high leverage volatility, leading to larger liquidations during volatile periods.
What sources are the liquidation data published based on?
Liquidation data is compiled and published by Coinglass, a reputable platform that tracks cryptocurrency contract and derivative markets.
Source: https://tintucbitcoin.com/thanh-ly-hop-dong-mang-tien-dien-tu/
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