Liquidations occur when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader cannot meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Crypto exchange FTX recorded over $519 million in short liquidations, the most among its counterparts, followed by OKX at $71 million and Binance at $46 million. Some on Crypto Twitter remarked the move was unusual.
Bitcoin-tracked futures saw some $368 million in both long and short liquidations, followed by ether futures at $356 million. Among the other majors, Cardano’s ADA futures saw $16 million in losses for traders.
Meanwhile, open interest, or the amount of outstanding derivative contracts that have not been settled, increased by 6.6%, implying traders opened more positions in anticipation of a further price surge.
The moves came amid a rise in broader equity markets. Tech-heavy Nasdaq ended Wednesday 2.25% higher and the S&P500 added 1.63%. Asian markets rose on Thursday, with Japan’s Nikkei 225 increasing 0.90% and Hong Kong’s Hang Seng adding 0.63% since open.