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During the recent liquidation event, a trader faced a staggering loss of $55.9 million, while another witnessed $10 million worth of hedged positions being liquidated.
The cryptocurrency market experienced a significant setback on August 18, as Bitcoin and Ether prices dropped to a two-month low. This decline triggered a series of liquidations for numerous derivative traders, resulting in billions of dollars’ worth of hedged positions being liquidated.
Within a single trading day, a total of 176,752 traders faced liquidations, with a majority of these occurring in the last 12 hours. This sudden surge in price volatility followed closely after a period of historically low volatility for BTC and ETH.
Two particularly striking liquidations garnered attention within the crypto community due to their extraordinary scale.
During the price slump, an investor trading the ETHBUSD contract on Binance was liquidated at $1,434.37, leading to a loss of $55.9211 million, marking the day’s largest liquidation. Another trader using the BTCUSDT contract on Binance suffered nearly $10 million in losses through liquidations.
This billion-dollar liquidation event stands as the most significant in the crypto market over the past eight months, second only to the event during the FTX collapse.
The factors contributing to this price tumult encompass a range of influences, including the SpaceX Bitcoin write-down and macroeconomic trends, as both BTC and ETH had been trading within specific ranges for the preceding months.
BTC managed to hold onto the pivotal $28,000 support for a substantial duration, whereas ETH retained the $1,500 support level before succumbing to the market pressures on August 17.
Liquidity within the crypto market was notably constrained, leading to significant drops in trading volumes on major exchanges.