In the past hour, the cryptocurrency market recorded contract liquidations of up to $549 million.
Data shows that most liquidations are concentrated in buy (long) positions with $517 million, where ETH was liquidated for $180 million and BTC for $112 million.
MAIN CONTENT
The cryptocurrency market faced significant liquidation pressure in 1 hour with a total of $549 million.
Most liquidations came from long positions with $517 million, while shorts accounted for $31.8 million.
ETH and BTC are the two that suffered the largest liquidation losses, $180 million and $112 million respectively.
How has the cryptocurrency market experienced contract liquidation phenomena recently?
The latest data from Coinglass, recorded on the afternoon of August 14, shows that assets in cryptocurrency network contracts were liquidated up to $549 million in just 1 hour.
This reflects high pressure on the market, causing many positions to become invalidated simultaneously due to strong price fluctuations. Long positions were overwhelmingly liquidated with $517 million while short positions only accounted for $31.8 million, indicating a downward trend during this period.
This is an important indicator reflecting the strong volatility of the cryptocurrency market and needs to be carefully considered by investors in risk management strategies.
What are the characteristics of liquidations of ETH and BTC?
ETH and BTC are the two cryptocurrencies with the highest liquidation values during this period, recording $180 million and $112 million respectively.
The concentration of liquidations in ETH also reflects the strong volatility in the Ethereum ecosystem, while BTC still plays a crucial role under significant liquidation pressure despite long positions being in the majority.
The cryptocurrency market always contains unpredictable fluctuations, especially with derivative contracts like futures contracts that create significant leverage effects leading to rapid liquidation when prices fluctuate sharply.
Cryptocurrency financial expert, 2024
How does contract liquidation affect investors?
Contract liquidation causes investors to lose most of the capital they have staked in margin positions. The overwhelming liquidation of long positions indicates severe declines when the market goes down or adjusts sharply.
The rapid liquidation of hundreds of millions of dollars creates significant liquidity pressure, forcing many investors to close positions at lower prices, creating a cascading effect on the overall cryptocurrency market price.
How does the contract liquidation mechanism operate in the cryptocurrency market?
Contract liquidation occurs when the price of the underlying asset moves against the user's margin position, causing the margin ratio to fall below the required level.
When this happens, the exchange will automatically close the position to prevent the risk of losses exceeding the margin, ensuring stability for the system. This is a common mechanism, especially on exchanges that offer futures contracts with high leverage ratios.
Frequently Asked Questions
What is contract liquidation?
Contract liquidation is the forced closure of margin positions when the collateral asset falls below the required level, usually occurring due to strong price fluctuations.
Why are long positions liquidated more than shorts?
Long positions are often more affected when the market experiences a sharp decline, causing the asset's price to drop significantly and leading to the loss of the margin.
What causes ETH and BTC to have high liquidation rates?
ETH and BTC have large market caps and high liquidity, so related contracts account for a significant proportion of overall liquidations.
How does contract liquidation affect market prices?
Mass liquidations create strong selling pressure, pushing prices down sharply and increasing market volatility.
How to reduce the risk of contract liquidation?
Investors need to manage leverage properly and use effective risk management strategies.
Source: https://tintucbitcoin.com/thanh-ly-hop-dong-crypto-550-trieu-usd/
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