Have Crypto Traders Learned? "Only" USD 600M Liquidated In One Hour
Another wave of liquidations hit the crypto market on the last day of the first quarter of 2021, possibly clearing the way for a further bitcoin (BTC) rally in April.
More than USD 600m in cryptoasset trading positions was liquidated in one hour today (08:34 UTC), bringing total liquidations to more than USD 1bn in the past 24 hours (156,729 positions in total), per bybt.com data.
95% of the liquidated positions are long positions, while BTC accounts for more than 50% of them.
However, this wave of liquidations is lower, compared with USD 1bn liquidated in one hour two weeks ago. Also, almost 200,000 positions were liquidated back then.
At the time of writing, BTC trades at USD 58,570 and is down by 3% in an hour, trimming its daily gains. The price is still up by 6% in a week.
Experienced traders are advising newcomers to stay away from leveraged trading.
It refers to borrowing funds so that you can take a larger position than you would be able to with your existing funds so that you can potentially generate a higher profit. However, while margin trading enables traders to amplify their returns, it can also lead to increased losses and liquidations.
As reported on multiple occasions, long liquidations have become more numerous this year. With bitcoin (and other coins) breaking all-time highs, some traders may feel unable to gain significant exposure without margin trading. However, a growing number of traders can’t afford to maintain their leveraged positions in the event of dips. Hence, the growing frequency of big liquidations.
Once again over leveraged, late longers, getting wiped out left and right - like every 2 weeks and every direction.… https://t.co/tgLdMzPVQJ— Pierre (@pierre_crypt0)
Beautiful stop loss hunting .. again. Now that all leveraged longs are liquidated, we finally have room for breakin… https://t.co/WpWdiTlcPl— PlanB (@100trillionUSD)
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(Updated at 08:54 UTC with a chart.)