In the past 24 hours, the cryptocurrency market recorded total contract liquidations reaching 424 million USD, with ETH and BTC accounting for the largest proportions.
Data from Coinglass shows that both long and short contracts are under strong liquidation pressure, reflecting significant volatility in major cryptocurrencies like Bitcoin and Ethereum.
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The total value of contract liquidations in 24 hours reached 424 million USD.
The disadvantage for long positions reached 230 million USD, while shorts were at 194 million USD.
Ethereum faced the highest liquidation at 130 million USD, while Bitcoin is nearly at 60 million USD.
What is the liquidation of cryptocurrency contracts?
Contract liquidation is the termination of leverage when market prices fluctuate beyond a safe margin level, ensuring the system avoids excessive risks. This is an important indicator reflecting excessive selling or buying pressure in the cryptocurrency market.
According to analyst Diamond Li from Coinglass, the large liquidation volume in the past 24 hours reflects strong fluctuations, warning investors to be cautious of rapid volatility in futures contracts.
How did contract liquidations occur in the past 24 hours?
Thanks to data from Coinglass on July 21, the total liquidation of cryptocurrency contracts reached 424 million USD, with long positions losing 230 million USD and shorts losing 194 million USD. This shows a balance of pressure between buyers and sellers in the market.
Further analysis shows that liquidations are primarily focused on two major coins: Ethereum and Bitcoin. Specifically, Ethereum recorded a record liquidation of 130 million USD, while Bitcoin nearly surged to 59.8 million USD.
The liquidation mechanism is a core part of maintaining safety in the cryptocurrency contract ecosystem, especially when the market is highly volatile like it is now.
David Chen, CEO Coinglass, 21/7/2024
What are the differences in the liquidation of Ethereum contracts compared to Bitcoin?
Specific data shows that Ethereum accounts for the majority of total contract liquidations, with 130 million USD, more than double Bitcoin's nearly 60 million USD. This reflects the higher volatility and trading volume in the ETH market during this period.
Experts suggest that due to Ethereum having many DeFi applications and Smart Contracts, derivative contracts related to ETH may be more susceptible to news and volatility than Bitcoin, which is a more stable store of value.
Cryptocurrency Liquidation Value (million USD) Contract Type Distribution Ethereum (ETH) 130 Long and Short balanced Bitcoin (BTC) 59.8 Long and Short nearly balanced
What factors currently affect cryptocurrency contract liquidations?
Strong price volatility due to macro news, leverage mechanisms, as well as selling pressure from whales have all led to large contract liquidations. The latest report from Coinglass indicates that liquidations occur when the market lacks liquidity or faces sharp correction points.
The cryptocurrency market always has the potential for volatility, and players need to keep updating liquidation data to manage risks effectively.
Jessica Nguyen, cryptocurrency market analyst, 2024
Frequently asked questions
Do contract liquidations affect cryptocurrency prices?
Yes, large volume liquidations can cause short-term price volatility due to sudden increases in sell or buy orders, impacting market supply and demand.
How to distinguish between long and short contract liquidations?
Long liquidations occur when prices drop excessively, while short liquidations happen when prices rise sharply, resulting in the loss of margin conditions.
Why is Ethereum liquidated more than Bitcoin?
Due to Ethereum having many derivative contracts and DeFi products, the trading volume and volatility are often higher, leading to more liquidations.
How to limit the risk of contract liquidation?
Investors need to closely monitor price fluctuations, use reasonable leverage levels, and set appropriate stop-loss orders to minimize risks.
How does Coinglass provide accurate liquidation data?
Coinglass aggregates and analyzes data from many major exchanges, ensuring transparent and timely information for investors.
Source: https://tintucbitcoin.com/tien-dien-tu-bi-thanh-ly-424-trieu-usd/
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