The total value of liquidation in the network reached nearly 93 million USD in just one hour.
Data from Coinglass recorded that liquidations mainly occurred in long positions with a rate exceeding 98%, indicating significant pressure on the cryptocurrency market during this timeframe.
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Total liquidation in 1 hour reached 92.785 million USD.
Long position liquidations accounted for over 98% of total liquidations.
Short position liquidations were low, only about 1.7 million USD.
What is cryptocurrency liquidation and why is it surging?
Cryptocurrency liquidation is the forced closure of trading positions when losses exceed the margin to protect the exchange and investors. Liquidations reaching nearly 93 million USD in one hour reflect strong volatility, causing many buying investors to have their positions closed.
This result shows significant pressure on long positions in the cryptocurrency market, often arising from factors such as rapid price volatility, changes in investor sentiment, or economic-financial events that directly impact.
Detailed analysis of liquidation data in the past hour
According to Coinglass data updated on August 22, the total liquidation value in the network reached 92.785 million USD, with 91.0882 million USD being long positions liquidated, accounting for over 98%. Liquidation of short positions only reached 1.6968 million USD.
This indicates that investors betting on a price increase have lost control, forced to close positions when the market reverses. Meanwhile, the relatively low short position shows that selling pressure has not created similar significant losses.
“The liquidation of tens of millions of USD in a short time reflects the very high level of risk and volatility in the cryptocurrency market today. Investors need to be cautious with positions that have high leverage.”
– Cryptocurrency Market Analysis Report, Coinglass, August 2023
The potential impacts of strong liquidations on the market
Mass liquidation of long positions can drive cryptocurrency asset prices down sharply due to a sudden increase in selling pressure, triggering a chain reaction on exchanges.
This move also increases instability and high-risk concerns for investors, especially those using large leverage tools for trading. Risk management and selective positioning have become more crucial than ever.
Strategies to minimize risk during large liquidations in the cryptocurrency market?
To limit losses from liquidations, investors need to closely monitor leverage ratios, set reasonable stop-loss levels, and diversify their investment portfolios. Using risk management tools is also very helpful in a highly volatile environment.
Additionally, monitoring news and market trends through reliable data sources is necessary to make timely decisions, minimizing losses in sudden market reversal situations.
Frequently Asked Questions
What does liquidation in the cryptocurrency market mean?
Liquidation is the forced closure of trading positions when collateral is insufficient, typically occurring when prices fluctuate sharply, causing losses to exceed the margin.
Why does the liquidation of long positions account for such a high proportion?
The sudden drop in asset prices caused many long positions to incur significant losses, forcing the system to automatically close positions to avoid deeper losses.
How do large liquidations impact the market?
Strong liquidations create substantial selling pressure, potentially causing the cryptocurrency market to decline rapidly and increasing volatility risk.
How to limit liquidation risk when trading cryptocurrencies?
Managing reasonable leverage, setting stop-losses, diversifying portfolios, and closely monitoring the market helps minimize liquidation risk.
What data sources are liquidation data usually provided by?
Reliable data sources like Coinglass continuously update liquidation data on major trading platforms.
Source: https://tintucbitcoin.com/thanh-ly-1-gio-dat-92-785-trieu-usd/
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