Huge Altcoin Short Squeeze Hits Markets As Liquidation Volume Hits $500 Million

Arman Shirinyan

Altcoin Market Experiences Series Of Major Liquidations As Traders Switch From Panic To FOMO

According to data shared by Santiment on-chain data provider, Bitcoin’s rapid spike to a new local high of $47,000 was followed by major liquidation volume in the altcoin market.

As the chart suggests, the average altcoin funding rate bounced back quickly from the short zone and entered the long zone. Bitcoin’s funding rate remained relatively neutral until BTC hit the resistance zone. Just before the peak to $47,000, the number of short orders in the market gradually increased.

The increase in the number of shorts is explained by the market’s disbelief in the first cryptocurrency, which tested the resistance at least three times without success. But despite the negative market sentiment, as soon as BTC broke through, the number of long orders immediately spiked as FOMO tendencies hit the crypto market.

Liquidations reached $500 billion

When the significant volume of short orders opened just before a strong positive BTC move, the market saw a rapid increase in the volume of liquidations, currently reaching $500 million.

Bitcoin and Ethereum accounted for a large share of the liquidations, with $170 million and $118 million respectively. As expected, most orders liquidated on several centralized exchanges were short orders. But at the same time, some exchanges, such as Huobi, reported a higher number of prolonged liquidations.

While market participants have been enjoying the positive performance, some traders have already been unable to capitalize on the rally by opening “FOMO longs” above USD 47,000, resulting in liquidations as the first cryptocurrency fell nearly 2% at one point.

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