NEW YORK, February 29, 2024 — A single trader lost a staggering $222.65 million betting on ether as a wave of liquidations swept through cryptocurrency markets, resulting in nearly $2.6 billion in total losses over the past 24 hours, according to data from CoinGlass. The dramatic sell-off underscores the inherent risks of leveraged trading in the volatile crypto space.
Crypto Carnage: $2.6 Billion Wiped Out in 24 Hours
A sudden price drop triggered massive liquidations across major exchanges, highlighting the dangers of high leverage in crypto.
- Over $2.58 billion was lost due to liquidations in the last day.
- The largest single liquidation totaled $222.65 million on Hyperliquid.
- Ether experienced the biggest losses, with over $1.15 billion in positions liquidated.
- Long positions bore the brunt of the damage, accounting for roughly $2.42 billion of the total losses.
The largest single liquidation occurred on decentralized derivatives exchange Hyperliquid, where the $222.65 million ETH-USD position was wiped out. This event coincided with ether’s sharp decline of as much as 17% in the last 24 hours, mirroring similar drops in bitcoin and other major tokens amid thin trading volumes.
What are crypto liquidations and why do they matter? Liquidations happen when a trader’s leveraged position is automatically closed by an exchange to prevent further losses as the price moves against them. These forced sales can exacerbate market downturns and trigger a cascade of further liquidations.
Traders often use liquidation data to assess market sentiment. A large number of long positions being liquidated can signal a potential market bottom, while short liquidations might indicate an impending price surge.
In total, 434,945 traders were liquidated over the past day. Bullish, or “long,” positions accounted for the vast majority of the losses, totaling approximately $2.42 billion, while short positions accounted for just $163 million. Hyperliquid experienced the most significant damage, with $1.09 billion in liquidations—almost entirely from long positions—representing over 40% of the total losses across all exchanges. Bybit followed with $574.8 million in liquidations, and Binance recorded around $258 million.
Ether bore the brunt of the sell-off, with more than $1.15 billion in ETH positions liquidated in the past 24 hours. Bitcoin followed with roughly $788 million, and Solana saw approximately $200 million wiped out, according to liquidation heatmap data.
Liquidations are a common occurrence in the crypto market, particularly during periods of increased volatility and low liquidity. These events serve as a stark reminder of the risks associated with leveraged trading and the potential for rapid and substantial losses.
Spikes in liquidations can help traders identify potentially overcrowded trades and possible market reversals. When combined with data on open interest and funding rates, liquidation metrics can provide strategic insights for entering or exiting positions, especially in highly leveraged markets prone to sudden price swings.
