Millions In Crypto Longs Liquidated As Bitcoin Plunges


Quick Read

  • Bitcoin rapidly fell below $11,000 after briefly breaching $12,000 for the first time in months.
  • Over $140 million in crypto longs have been liquidated in the last 24-hours on BitMEX alone.

After seeing an impressive rally past $12,000, a level not seen this year, Bitcoin plummeted back below $11,000. The cryptocurrency has recovered slightly and is now trading at $11,200. Ethereum is currently trading at $375.

Millions In Crypto Longs Liquidated

According to Cryptometer.io, over $140 million in Bitcoin longs were liquidated in the last 24-hours on BitMEX alone. Only $27.9 million in Bitcoin shorts were liquidated during the same time-frame.

Source: Cryptometer.io

Bitcoin long positions allow traders to bet on Bitcoin’s price rising in the future. Some traders also utilize leverage trading which can amplify gains but also amplify losses at the same rate.

Leverage trading allows traders to trade with greater trading power. For example, to open a one Bitcoin position with 10x leverage, the trader only contributes 0.1 Bitcoin to the position and borrows the rest. Through this, traders can make trades with one whole Bitcoin and therefore amplify returns on the 0.1 Bitcoin by approximately 10x.

However, leverage trading also amplifies losses. For example with 10x leverage, a 10% move in an opposite direction may result in Bitcoin longs being liquidated and the trader losing their entire initial contribution of 0.1 Bitcoin. Therefore, traders trading with large amounts of leverage may face liquidations during relatively minor price fluctuations.

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