Bitcoin lost its foothold above $20,000 at the start of the week, creating uncertainty among investors who previously believed that the price of Bitcoin was in the process of recovery. This drop saw more selling in the space, albeit to a lesser degree than previously recorded. With digital assets now beginning another recovery trend, traders who have bet on their ability to move upwards are finding themselves in very unpleasant situations.
Bitcoin short traders suffer losses
Bitcoin started to rebound after the Consumer Price Index showed that the inflation rate in the United States had reached its highest level in 40 years. At 9.1%, this was the highest number ever recorded since 1981 and this has prompted investors to seek other alternatives to protect their fortunes from eroding inflation. The result was an influx of new money into the bitcoin market.
The recovery saw many traders who bet on Bitcoin suffer losses. info from Coinglass It states that over the past 24 hours, nearly $200 million of liquidations have been recorded and the majority of liquidations have been from short traders. In total, more than 57,800 traders were liquidated and at a rate of 83.91%, more than 48,000 traders who were betting on the cryptocurrency market recovering from losses incurred.
BTC price recovers above $20,000 | Source: BTCUSD on TradingView.com
Even with the passage of time, the liquidations did not subside. In just the last 12 hours, the filter numbers have reached over 54 million. At the time of writing, the past four hours have seen liquidations worth $21 million, which are expected to increase as the recovery continues.
Ethereum takes the lead
In most cases, when market liquidation is calculated, Bitcoin always takes the lead. However, this is not the case this time as someone else took the lead in the liquidations. Ethereum’s recovery over the past day was just as dramatic as Bitcoin’s recovery and short traders got caught in the wave.
The second largest cryptocurrency by market cap accounts for the most liquidations recorded in the last day. It saw the liquidation of more than 72.64 thousand ETH, valued at more than $90 million. Bitcoin, which usually tops the group, has only seen half of its liquidation value in the same time period.
ETH liquidations ramp up | Source: Coinglass
The same is the case on a 12-hour basis, although Bitcoin is catching up in this regard. Ethereum continues to lead, but by a much smaller margin.
Other cryptocurrencies that have posted high liquidations in the last day include MATIC, SOL, and AAVE at $8.52 million, $5.93 million, and $2.81 million, respectively.
Featured image from Financial Times, chart from TradingView.com
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