In just 24 hours, derivative traders lost a staggering $202 million due to the recent crash of Bitcoin. The cryptocurrency’s value plummeted, causing significant losses for those who had invested in it through derivatives. This highlights the volatility of the cryptocurrency market and the risks associated with investing in it. With no guarantee of returns, traders must be cautious and informed before investing in cryptocurrency.
On March 10, the cryptocurrency market experienced a significant sell-off, causing Bitcoin to drop to below $20,000 for the first time in three months. The market sentiment is currently bearish, and leveraged traders are struggling with millions of dollars in active trading positions liquidated during this period.
According to Coinglass data, derivative traders have lost approximately $202 million in the past 24 hours. Leveraged trading or futures market is when traders speculate using derivatives or loans from the exchange.
Traders can either go long or short, depending on their prediction of the direction of the coin’s price. When the price reaches a particular level contrary to the trading position, the trade is liquidated, and the trader loses their capital.
BTC has the largest liquidation volumes, with more than $60 million, followed closely by Ethereum with $52 million. These losses are the highest recorded since mid-January, where over $490 million was liquidated in a single day across different exchanges.
Various developments have contributed to the market’s steep decline. For instance, crypto bank Silvergate closed its crypto payment network on March 9, 2023. Additionally, the New York Attorney General has sued crypto exchange Kucoin, alleging that it offered and sold unregistered securities.
The market has also been affected by external factors such as recent forecasts from the US Federal Reserve, which is expected to lead to higher interest rates during the next Fed meeting scheduled for March 22.
At the time of writing, Bitcoin has recovered slightly and is trading for $20,126.