In the cryptocurrency market, investors have had to deal with liquidations following the sharp rises in Bitcoin‘s price. Those who chose short positions have taken on the majority of the losses. Analysts at Coinbase predict that the rally will continue throughout December, and those who persist with short positions may face increasing losses.
In the past 24 hours, short position holders have experienced losses of over $85 million as a result of the liquidation of more than 100,000 positions in the BTC/USD pair. A total of $310 million worth of both long and short positions were liquidated in the market. More than $180 million of these liquidations came from short sellers betting on price declines.
Bitcoin continues to rise with expectations that spot exchange-traded funds will soon be approved. However, analysts point out that recent price movements are more dependent on improving macroeconomic outlook. Coinbase stated in a report released on December 1 that current conditions could last until at least January and that short sellers may face potential losses.
The highest trading volume during this period occurred on Binance, where investors faced $120 million worth of liquidations across various crypto assets. Short sellers on Binance experienced losses of $66 million, including $23 million in the BTC/USD pair alone. The largest single liquidation in the past 24 hours occurred when a trader lost over $6 million in the BTC/USD pair on BitMEX.
Liquidations in the futures market occur when the trading conditions cannot be met through contracts created by investors. In such cases, the exchange partially or completely closes the positions of traders at a loss. The futures market is known as a high-risk, high-reward strategy typically used by professional investors.