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Bitcoin had lost its footing above $20,000 at the start of the week, sparking uncertainty among investors who had previously believed that the price of bitcoin was in a recovery trend. This decline saw more sell-offs in the space, albeit to a lesser extent than previously recorded. With the digital asset now starting on another recovery trend though, traders who had bet against its ability to move upward are finding themselves in very unpleasant situations.
Bitcoin Short Traders Suffer Losses
Bitcoin had begun to recover just after the CPI had shown that the United States inflation rate had hit a new 40-year high. At 9.1%, it was the highest number ever recorded since 1981 and this had prompted investors to look to other alternatives for protecting their wealth from being eaten into by inflation. The result had been an influx of new money into the bitcoin market.
Related Reading | Bitcoin Price Spends Four Weeks At 2017 Peak Prices, What Comes Next?
The recovery had seen a lot of traders who had bet against bitcoin suffering losses. Data from Coinglass shows that in the last 24 hours, almost $200 million in liquidations have been recorded and the majority of the liquidations had been from short traders. In total, there have been more than 57,800 traders liquidated and at a percentage of 83.91%, more than 48,000 traders who were betting against the crypto market’s recovery have suffered losses.
BTC price recovers above $20,000 | Source: BTCUSD on TradingView.com
Even as time has gone on, the liquidations have not subsided. In the last 12 hours alone, the liquidation numbers have come out to more than 54 million. At the time of writing this, the last four hours had seen liquidations of $21 million and this is expected to ramp up as the recovery continues.
Ethereum Takes The Lead
In most cases, when the market liquidations are calculated, bitcoin always takes the lead. However, that is not the case this time as another has taken the lead in liquidations. Ethereum’s recovery over the last day had been just as dramatic as that of bitcoin and short traders were caught in the wave.
Related Reading | Mid Cap Crypto Coins Lead In July, Best Way To Weather The Winter?
The second-largest cryptocurrency by market cap accounts for the majority of the liquidations recorded in the last day. It has seen more than 72.64K ETH liquidated, amounting to more than $90 million. Bitcoin which usually leads the pack has only seen half the value of liquidations in the same time period.
ETH liquidations ramp up | Source: Coinglass
The same is the case on a 12-hour basis, although bitcoin is catching up in this regard. Ethereum continues to lead but by a much smaller margin.
Other cryptocurrencies that have recorded high liquidations in the last day include MATIC, SOL, and AAVE with $8.52 million, $5.93 million, and $2.81 million respectively.
Featured image from Financial Times, chart from TradingView.com
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