Cryptocurrency Market Suffers Heavy Loss with $650 Million Liquidation of Long Positions

04/24/2023 09:41 • Metaverse & Beyond • 135 views

On April 24th, according to The Block data, approximately $650 million in long positions in the cryptocurrency market have been liquidated since April 17th. Most of the trading volume is on Binance and OKX, with long liquidations of $234 million and $197 million since last Monday, respectively.

Data: Last week, approximately $650 million in long positions in the crypto market were liquidated

With increasing volatility in the crypto market, the risk of losing money is always looming large for traders. Recently, on April 24th, prominent data provider The Block reported that almost $650 million of long positions in the crypto market were liquidated since April 17th. The heavy liquidation has caused a ripple effect on the market, leaving traders to suffer significant losses.

The Reason Behind the Liquidation

There are several reasons behind the massive liquidation of long positions. The first one is the bearish market trend. Bitcoin, the most valuable cryptocurrency, has been facing a downtrend in its price for a few weeks. It started from the sudden dip in value on April 18th, which saw Bitcoin prices drop to $51,000 from its high of $65,000 earlier in the month. Such volatility in the market can cause panic among traders and lead to heavy liquidation.
Another reason behind the liquidation is the regulatory crackdown on the crypto industry. Recently, the Turkish central bank announced the ban of cryptocurrency as a form of payment, which caused a sudden drop in Bitcoin value by 4%. Similarly, the Indian government also proposed to ban cryptocurrencies except for the digital rupee issued by the Reserve Bank of India. Such moves from the government can hurt investor sentiment and lead to long liquidation, forcing traders to sell their positions.

Impact of the Liquidation on the Market

The massive liquidation has significant implications on the overall crypto market. First, it can lead to instability in the market and cause the prices to drop further. It can also lead to fear among investors and traders, causing a panic sell-off, which can worsen the market situation.
Moreover, it can lead to a loss of trust in the crypto market, causing investors to move their money to other investment opportunities. In addition, it can also lead to fear among new investors, who may refrain from investing in the market, leading to insufficient liquidity.

Trading Volume on Binance and OKX

The data provided by The Block also shows that the trading volume for long liquidations was highest on the Binance and OKX exchanges. Binance saw long liquidation of $234 million, while OKX saw $197 million worth of long positions liquidated since last Monday. This scenario is not unusual as Binance is one of the largest cryptocurrency exchanges globally, making it a popular choice for traders.

Conclusion

The liquidation of long positions in the crypto market is not new, but the recent one has caused a massive loss of $650 million. The market seems to be facing headwinds with a volatile trend and regulatory crackdowns from various countries. The impact of the liquidation may lead to panic among traders and investors, causing a sell-off and increasing instability in the crypto market.

FAQs

Q1. Is the liquidation of long positions common in the crypto market?

Yes, the liquidation of long positions in the crypto market is quite common, and it usually happens due to market volatility or regulatory crackdowns.

Q2. What can traders do to minimize the risk of liquidation?

Traders can use risk management tools such as stop-loss orders and smart contracts to minimize the risk of liquidation.

Q3. What is the best way to invest in cryptocurrencies?

The best way to invest in cryptocurrencies is by conducting thorough research about the market and the particular cryptocurrency in which you wish to invest. It’s also essential to invest only what you can afford to lose.

This article and pictures are from the Internet and do not represent qiAiAi's position. If you infringe, please contact us to delete:https://www.qiaiai.com/metaverse/18361.html

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.