The cryptocurrency market has experienced significant liquidations in the past day, despite the recent recovery of Bitcoin and other altcoins.
Bitcoin and the wider crypto sector ended February on a bearish note, with BTC dropping to as low as $78,000. However, a sudden turnaround has seen these digital assets bounce back in the last 24 hours.
The catalyst for this recovery was an announcement by former President Donald Trump regarding a Crypto Strategic Reserve. The reserve includes Bitcoin, Ethereum (ETH), XRP (XRP), Solana (SOL), and Cardano (ADA). Trump initially mentioned XRP, SOL, and ADA in his announcement but later confirmed BTC and ETH as well, stating that they would be at the core of the reserve.
Since the US elections, the Crypto Reserve has been highly anticipated within the crypto community. Trump’s announcement has had a significant impact on trader sentiment, leading to a surge in prices across the board.
Bitcoin reached the $95,000 level during the rally before pulling back to $92,800. Ethereum also saw a similar pattern, dropping from $2,550 to $2,360. Both BTC and ETH are up 8% and 6%, respectively, in the last 24 hours. XRP, SOL, and ADA, the coins initially mentioned in the reserve, have seen even stronger rallies of 17%, 13%, and 48%, respectively.
The bullish momentum has not been limited to the five coins in the reserve, as other cryptocurrencies have also experienced price increases. However, this volatility has led to a significant number of liquidations on derivatives platforms.
According to data from CoinGlass, a total of $971 million in cryptocurrency derivatives contracts were liquidated in the past day. Short investors accounted for over 57% of these liquidations, totaling around $558 million. Long holders also saw around $412 million in liquidations due to the market pullback.
Bitcoin and Ethereum led the way in terms of individual symbols, with $353 million and $182 million in liquidations, respectively.
Overall, the cryptocurrency market has seen a flurry of activity in the past day, driven by Trump’s announcement and subsequent price surges. Despite the liquidations, the market remains volatile and unpredictable. Investors and traders should proceed with caution and stay informed about the latest developments in the crypto space.