The Ethereum market experienced a significant downturn on Monday as the Ethereum Foundation began selling coins. This sudden plunge triggered a chain of liquidation events, causing ETH traders to endure colossal losses in just one day. By October 10th, the Ethereum liquidation figures skyrocketed to over $32 million due to the price crash. The brunt of these losses fell upon long traders, with Coinglass data revealing that 87.61% of all ETH liquidation volumes originated from this group. Consequently, out of the $32 million liquidation volumes recorded, $29.56 million resulted from long positions, leaving only $2.91 million from short positions.
In addition to the overwhelming losses, Ethereum also claimed the title for the largest single liquidation event within a 24-hour period. This trade occurred on the Binance crypto exchange and involved the ETHBUSD pair, amounting to a total value of $4.53 million when the liquidation took place. Surprisingly, Ethereum surpassed Bitcoin in terms of liquidation volumes during this time frame. While Bitcoin typically dominates liquidation volumes, it only reached $19.28 million compared to Ethereum’s $32.48 million. Furthermore, like Ethereum, most of Bitcoin’s liquidation volumes resulted from long traders.
Although the liquidation volumes over the past day were not the highest for the year, they remain highly significant. CoinGlass data reveals that, as of now, 20,525 crypto traders have endured liquidation losses amounting to a staggering $56.42 million. Of this total, long traders accounted for $44.9 million in losses, while short traders faced $11.48 million in losses. Apart from Bitcoin and Ethereum, other cryptocurrencies also witnessed remarkable liquidation volumes. Bitcoin Cash (BCH) recorded $3.59 million, XRP reached $2.77 million, and Solana (SOL) stood at $2.75 million. Among the exchanges, Binance held the largest volumes at $24.86 million, followed by OKX with $17.16 million. ByBit ranked third with $6.90 million, Huobi secured $5.8 million, and CoinEx rounded off the top 5 with $1.05 million.
If the market experiences any more significant price swings akin to what occurred on Monday, it is highly likely that liquidation volumes will continue to rise. The only scenario in which these volumes would remain low is if the market enters a period of tight range trading and volatility decreases. Traders must carefully monitor the market conditions and exercise caution to prevent further losses.
Overall, the recent Ethereum liquidation nightmare has demonstrated the volatility and risks associated with cryptocurrency trading. It serves as a stark reminder that traders must be vigilant, diversify their portfolios, and employ risk management strategies to protect themselves against drastic price fluctuations. Additionally, exchanges should prioritize providing robust risk management tools to help traders mitigate potential losses. Only through such measures can the cryptocurrency market evolve into a more stable and secure environment for all participants.