Fed Interest Rates Increase Crypto Market Liquidation Over $330 Million
The FOMC meeting held on Wednesday and the subsequent results had a major impact on the state of the crypto market. Given the large price fluctuations during and after the meeting, liquidation volumes in the market had increased rapidly. Tens of thousands of traders found themselves in the crossfire in what has turned out to be the biggest liquidation trend in recent months.
Crypto Liquidations Reach $330 Million
On Wednesday, the Fed announced it would raise interest rates by another 0.75 points. This decision had a direct impact on the crypto market and broader macro markets, causing the price of bitcoin to plummet by about 8% before a rapid recovery.
The decline led to massive liquidations across the market. On Thursday, the total liquidation in the crypto market had passed $330 million, affecting more than 88,000 traders. Given the drop, long traders had obviously suffered the most, but as the price had also recovered strongly, short traders were also hit hard.
Liquidations Exceed $330 Million | Source: coin glass
Of the $336 million in liquidations recorded over the past day, 58.96% came from long traders, meaning $138.13 million came from short liquidations. The biggest single liquidation came from the Okex exchange, with a single trade worth $3.13 million on the BTC-USDT-SWAP pair.
Ethereum takes the lead
Recently, the focus has been on Ethereum after the digital asset was successfully upgraded from proof of work to proof of stake. This increased focus has also boosted the performance of the cryptocurrency and its traders in recent times.
ETH liquidations made up almost half of the $336 million in liquidations recorded in the crypto market in a 24-hour period. With 117.73K ETH liquidated, it came in at a dollar value of $151.45 million during this period.
Market cap at $884 billion | Source: Crypto Total Market Capitalization on TradingView.com
In contrast, the leading cryptocurrency, Bitcoin, registered a total of 5.50K BTC that was liquidated during this period for a total of $105.31 million. This means that ETH’s liquidation volumes were about 50% more than BTC’s.
XRP was another token that saw massive liquidations, albeit to a lesser extent compared to bitcoin and Ethereum. XRP saw volume of $9.77 million, while SOL and ETC reached $6.73 million and $5.61 million, respectively. All other cryptocurrencies saw liquidation volumes below $5 million.
Featured image from The World Economic Forum, chart from TradingView.com
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