Memecoin futures suffered liquidations of nearly $90 million following price adjustments following a massive surge in the previous week.
Over the past 24 hours, futures tracking cryptocurrencies saw losses exceeding $550 million as Bitcoin (BTC) oscillated and then declined from the $68,000 level, causing volatile price movements catching both bulls and bears off guard.
Bitcoin and Ether (ETH) briefly surged above $68,500 and $3,700, respectively, due to excitement from several catalysts continuing into the second week. However, profit booking commenced in early Asian hours as Bitcoin dropped to $64,500 before climbing back to $67,000.
Overall, the CoinDesk 20 (CD20) index rose by over 6%.
Long positions, betting on price rises, suffered losses of over $240 million, while short positions, betting on declines, incurred losses of $320 million.
Futures on Dogecoin (DOGE), Shiba Inu (SHIB), and Pepecoin (PEPE) recorded total losses of $90 million on exchanges amid notable price movements. Bullish bets on DOGE hit a weekly high last week, contributing to its 110% weekly gain.
Liquidation is the situation where an exchange forcefully closes a trader's leveraged position due to the loss of their initial deposit. Extensive liquidations may indicate local highs or lows in price movements, offering traders the opportunity to position themselves accordingly.
Traders anticipate Bitcoin surpassing its previous highs before the April halving event, with hopes for approval of an Ether spot ETF in May.
Some funds anticipate an increase in leverage in the coming days as Bitcoin approaches its highs at $69,000.
"Leveraged buyers are unlikely to slow down until we surpass record highs, which could be anytime now," said cryptocurrency fund QCP Capital in a Tuesday report on Telegram. "Leverage effect is comparable to what we saw in 2021, pushing the front end of the price curve up and keeping the back end at higher levels."
Data suggests that futures betting volume in cryptocurrencies exceeded $66 billion in the past week, with interest rates on some tokens exceeding 100% annually. Financing refers to the amount traders pay to borrow additional funds to execute larger trades.
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