After Bitcoin price drops, over USD 550 million has evaporated from the futures market
Liquidation of long futures contracts hit an eight-month high.
Data from the crypto data analysis company Glassnode shows that due to the large collapses in BTC prices recorded last Friday, when the price of the largest cryptocurrency fell below $ 22,000, liquidations of long positions on futures contracts reached an eight-month high - over 550 million USD within 24 hours.
Bitcoin crypto down and with it the results of investors in the entire futures market.
The cryptocurrency market suffered a serious downturn last Friday, with major cryptocurrencies shedding key support and relegating to new monthly lows, ending an uptrend over the past month. It is noteworthy that the Friday sale is the biggest daily reduction in the BTC price since June 16 this year.
Although Bitcoin last week tried to hit the $ 25,000 level, it fell below the $ 22,000 mark, hitting a new two-week low. Ethereum, the second-largest cryptocurrency to break the $ 2,000 mark ahead of its scheduled expansion for mid-week, hit a new weekly low of $ 1,726 within 24 hours.
According to Glassnode data, 157,098 traders completed the liquidation of positions for a total amount of USD 551 million within 24 hours. In the case of Bitcoin, the total losses amounted to USD 203 million, while for Ethereum - USD 140 million.
The overall picture of the situation shows that the level of liquidated longs by far exceeded short positions, indicating a very high bullish sentiment before the collapse occurred.
It is believed that the sudden declines in the cryptocurrency market are related to the expectations of an interest rate hike in the United States in September. President of the Federal Reserve Bank of St. Louis - James Bullard, announced that he is in favor of a rate hike of 75 basis points. It is worth noting that a similar increase in the interest rate in June led to large drops also after an earlier longer period of increases.