The cryptocurrency market recorded a total contract liquidation value of up to 585 million USD in the past 24 hours.
Of which, the value of liquidated long positions accounted for 158 million USD, while short positions were 427 million USD. Specifically, Bitcoin and Ethereum were liquidated for 112 million USD and 183 million USD, respectively.
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The cryptocurrency market has a total contract liquidation of 585 million USD in 24 hours.
Short position liquidations dominate at 427 million USD, significantly higher than long positions.
Bitcoin and Ethereum were liquidated for 112 million USD and 183 million USD, respectively.
Why is the total contract liquidation value in cryptocurrency continuously increasing?
Data from Coinglass shows that in the past 24 hours, 585 million USD in contracts have been liquidated, clearly demonstrating strong volatility in the cryptocurrency market. Short positions accounted for a large portion at 427 million USD, reflecting significant downward pressure and strong participation from short traders.
"Contract liquidation is an important indicator reflecting market psychological volatility and the level of risk that investors are exposed to."
Nguyen Van Hung, CEO of XYZ Cryptocurrency Exchange, 2024
During sensitive times such as price corrections of Bitcoin and Ethereum, contract liquidations often increase due to leverage pressure and the involvement of whales and professional traders.
How do liquidations of long and short positions affect the cryptocurrency market?
The data shows that the liquidation of short positions reached 427 million USD, nearly 3 times higher than the long position of 158 million USD. This indicates that selling pressure is overwhelming and the market might be in a downtrend or deep correction.
Large short position liquidations often lead to temporary price recoveries due to short covering, while long position liquidations result in the market revolving around pessimistic sentiment. Organizations and individual traders should prioritize risk management during this volatile period.
How do the liquidations of Bitcoin and Ethereum affect the entire cryptocurrency market?
Out of the total 585 million USD in liquidations, Bitcoin accounted for 112 million USD and Ethereum for 183 million USD – the two largest cryptocurrencies by market capitalization. Their volatility triggers a domino effect impacting the value and overall sentiment of the entire cryptocurrency ecosystem.
"The volatility of Bitcoin and Ethereum is always a measure of market health; large contract liquidations indicate a high volatility phase and can be a significant opportunity or risk for investors."
Tran Minh Tuan, Cryptocurrency Market Analyst, 2024
Closely monitoring contract liquidation indicators helps users make timely and accurate investment decisions, while also warning about potential fluctuations affecting liquidity, prices, and trading strategies.
What factors influence the trend of contract liquidations in the current cryptocurrency market?
Factors such as global legal conditions, macroeconomic fluctuations, news about major blockchain projects, changes in consensus mechanisms, or network updates contribute to increasing or decreasing liquidation pressure.
The 2023 report from the International Blockchain Research University indicates that when the market experiences systemic shocks, contract liquidations typically increase by an average of 30% compared to normal periods. Investors need to pay attention and closely monitor these signs to mitigate risks.
How can traders effectively respond to large contract liquidations?
To limit losses when the market experiences strong contract liquidations, traders should focus on risk management, use appropriate leverage, and implement stop-loss orders to limit risk exposure. The experience of professional traders suggests maintaining a reasonable capital ratio and avoiding FOMO mentality.
Simultaneously, updating information, conducting technical analysis, and monitoring whale activity help predict trends and avoid surprises when the market changes suddenly. These strategies are widely applied by leading cryptocurrency investment funds in 2024.
Frequently asked questions
What is contract liquidation?
Liquidation of contracts is the process of forcibly closing trading positions when the account lacks sufficient margin, helping to limit losses and ensure market liquidity.
Why are short position liquidations higher than long positions?
Downward pressure combined with high leverage causes short positions to be liquidated more when prices suddenly rise or fluctuate sharply; additionally, traders often use high leverage when placing short orders.
What impact does contract liquidation have on the prices of Bitcoin and Ethereum?
Large contract liquidations create strong price oscillation effects, potentially leading to significant price fluctuations in the short term due to stop-loss orders and altering supply and demand in the market.
How to minimize risks when trading with leverage?
Tight risk management, reasonable leverage use, applying stop-loss orders, and closely monitoring market fluctuations help minimize the risk of contract liquidation.
What sources of information should be monitored to update contract liquidations?
It is advisable to monitor data from reputable blockchain analysis platforms and seek advice from industry experts for an accurate and timely perspective.
Source: https://tintucbitcoin.com/hop-dong-mang-tien-dien-tu-585-trieu/
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