Cryptocurrency tracking futures rack up more than $550 million in losses in the past 24 hours as Bitcoin (BTC) soars from $68,000 levels and then plummets, leaving bulls and bears alike stunned. This caused volatile price action.
Bitcoin and Ethereum (ETH) briefly hovered above $68,500 and just above $3,700, respectively, as the multi-catalyst euphoria continues into its second week. However, profit-taking started in the early hours of Asian time, and Bitcoin fell to $64,500 before recovering to the $67,000 level.
The broader CoinDesk 20 index (CD20) rose more than 6%.
Long, or high price bets, lost more than $240 million, while short, or low price bets, evaporated $320 million in positions.
Futures trading tracking Dogecoin (DOGE), Shiba Inu (SHIB), and Pepecoin (PEPE) lost a total of $90 million across exchanges in a highly unusual move. Last week, bullish bets on DOGE reached an all-time high, contributing to a weekly rally of 110%.
Liquidation is when an exchange forces a trader to close a leveraged position due to the loss of some or all of the trader's initial margin. Large liquidations may indicate local highs or troughs of rapid price movements, and traders may be able to take positions accordingly.
Traders widely expect Bitcoin to surpass lifetime highs ahead of April's halving event, and there are also hopes for a Spot Ether exchange-traded fund (ETF) to be approved in May.
As a result, some funds expect leverage to rise in the coming days as Bitcoin approaches its lifetime high of $69,000.
“Leveraged buyers will not relent until we hit a new all-time high, which could happen at any time,” crypto fund QCP Capital said on a Telegram broadcast on Tuesday. “This is leverage similar to what we saw in 2021, pushing the front end of the curve higher and keeping the back end higher.”
Leveraged bets on crypto futures have increased to more than $66 billion in the past week, data shows, the funding rate of some tokens is over 100% annually. Funding is the amount of money a trader pays when borrowing additional funds to make a larger trade.
On the other hand, some analysts believe that the abnormally large movement of the SHIB token overall bearish signalmemecoin's outperformance has historically marked Bitcoin's local top due to speculative froth.
