The cryptocurrency market faced its most severe wave of leveraged position liquidations since August, as $939.30 million in trades were closed on the night of October 15, according to CoinGlass data. Of this total, a staggering $791.62 million, or 84.3%, were in long positions driven by bullish sentiment that were unwound.
Bitcoin and Ethereum Lead Liquidation Losses
The intensified selling pressure rapidly dissolved the accumulated leveraged trades in the derivative markets. Ethereum experienced the largest liquidation at $286.11 million, while Bitcoin followed with $215.49 million. The single largest transaction of the day occurred on Binance, with a long position of $12.03 million in the BTC/USDT pair being settled at $80,208.96. Binance commanded a 52.3% share of the total volume of closed orders, reinforcing its position as one of the world’s largest cryptocurrency exchanges by trading volume.
CoinGlass data indicates a significant concentration of the $939.30 million liquidation in long positions, showcasing a strategic cleanup in the market amid intense selling pressure.
Altcoins, notable for their high liquidity and retail investor presence, also felt the strain. XRP saw $12.82 million in mandatory daily position closures, NEAR Protocol $12.32 million, and Dogecoin $12.18 million. This retreat in altcoins, following recent gains, contributed to unwinding risk-laden trades that had accumulated in the market over recent months.
Market Retains Support Despite Price Dip
Despite the sharp price declines, there was no definitive transition suggesting a permanent change in the broader technical landscape. Bitcoin tested its 50-day moving average near the $81,000 level during the pullback and encountered buying interest in this area.
Holding above the $80,000 threshold suggests that the upward trend is not fully invalidated, especially considering long-term support is seen around $72,000. Moving averages are fundamental technical indicators used to observe the direction of an asset by averaging its price over a certain period.
A “funding rate” is a periodic payment exchanged between traders in futures markets to maintain balance between long and short positions. A positive rate indicates higher demand for long positions than short ones.
Short Positions Face Squeeze Amid Rebound
Short positions established at local lows quickly came under pressure as Bitcoin and Ethereum prices rebounded sharply after retail investors opened sell orders amid the panic. This recovery incited chain reactions of position closures initiated by traders expecting further price drops.
The rapid turnaround from the bottom prices revealed that bear trades were not spared, with millions of dollars in short positions for Bitcoin and Ethereum closing within an hour.
Investors holding short positions in Bitcoin lost $15.94 million within one hour, accounting for 95.2% of the asset’s liquidations in that timeframe. Similarly, Ethereum short positions recorded losses amounting to $19.41 million. NEAR and Dogecoin also saw swift closures of sell orders in the same period.
The persistence of positive funding rates in major perpetual futures contracts, ranging from 0.005% to 0.009%, suggests that medium-term optimism has not entirely dissipated after the clean-up of leveraged positions.
