Massive futures market liquidations have followed the crypto market crash that saw the price of bitcoin (BTC) drop to a three-months-low price of $18,400. Futures liquidations across the crypto market reached over $434 million in the last 24 hours.
According to data from Coinglass, a cryptocurrency futures trading and information platform, over 84% of the liquidations that made up this amount were long liquidations, with more than 131,000 traders liquidated in the period.
The data also showed that the most significant single liquidation, valued at $10 million, occurred on BitMEX’s XBT/USD trading pair market. Meanwhile, the exchange with the highest liquidations volume was Okex (43.2%), followed by Binance (21.55%).
Ether (ETH) clocked in as the crypto market with the most enormous liquidation figure of around $166 million. BTC followed it with liquidations amounting to around $127 million.
The crypto market crash was not limited to Bitcoin alone. Other market-leading cryptocurrencies also dropped significantly, including ETH, which fell to a one-month low of $1,289, wiping out gains made during its remarkable run up to $1,700 on the back of anticipation of the merge.
What is fueling the crypto market crash?
While market data indicates that the market may already be staging a comeback spearheaded by Bitcoin, which has returned to trading at around $19,100 at the time of writing, several narratives have been noted to contribute to the volatility.
One narrative for ETH is that a post-merge selloff has kicked in. The ETH liquidations cascade was anticipated by analysts, including the head of research at London-based specialist provider of crypto-backed securities ETC Group, Tom Rogers.
While commenting on the positive signals that the ETH futures market volume surpassing BTC pointed to, the analyst warned that a sell-the-news price dip could cause massive liquidations post-merge.
“We expect higher levels of trader liquidations in the coming weeks as these colliding narratives play out,” Rogers said in a report last week.
Meanwhile, the Federal Reserve interest rate hike expected to be announced later this week fuels the pessimism across the entire crypto market. According to Reuters, there are strong indications that the Fed will announce a 75 basis point (0.75%) interest rate hike, although a 100 basis point increase is not off the books either.
This is owing to the prevailing market inflation, as shown by inflation data published by the U.S. Bureau of Labor Statistics (BLS) for August. Notably, when the data was published, the crypto market nosedived even as analysts maintained that the drop was not all bad.
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