Points
- Crypto investors lost approximately $1.08 billion due to falling prices of major cryptocurrencies.
- Nearly 300,000 traders were liquidated from their positions.
- Bitcoin and Ethereum experienced significant price drops.
- The crash was catalyzed by a weakening global economy and Japan’s stock market crash.
- Liquidations were highest on Binance, followed by OKX, Huobi, Bybit, and BitMEX.
Crypto investors and traders lost approximately $1.08 billion in total liquidations amid uncontrolled falling prices of prominent cryptocurrencies, including Bitcoin, Ether, and Solana.
Major Liquidations and Market Impact
On Aug. 5, crypto market prices saw a significant decline owing to the weakening global economy, which was catalyzed further by the sudden crash of Japan’s stock market. In the process, nearly 300,000 crypto traders were liquidated from their leveraged positions or collateral trades, according to data from Coinglass.
Bitcoin and Ether Price Declines
Amid the ongoing bear market, the prices of the most popular cryptocurrencies depreciated, with Bitcoin （BTCUSD） and Ether （ETHUSD） falling by over 10% and 20%, respectively. As a result, crypto traders anticipating a prolonged bull run lost their positions in the bloodbath.
Impact on Traders and Exchanges
As Bitcoin prices crashed from around $65,000 to the $50,000 mark, traders holding long positions on crypto exchanges lost over $315 million in under 24 hours. On the other hand, shorters lost $62.23 million in the process.
During the same timeline, traders with Ethereum long positions lost a total of $305 million, while traders holding short positions lost more than $50 million.
Distribution of Liquidations Across Exchanges
Long positions across all crypto assets lost over $930 million in 24 hours, while shorters lost $163.45 million. All told, nearly 80% of all traders got rekt in less than 12 hours.
According to Coinglass data, the largest single liquidation order happened on the crypto exchange Huobi, where a trader lost $27 million in the BTCUSD trading pair.
As shown above, most liquidations took place on Binance, the largest crypto exchange by trading volume. Other prominent crypto liquidations were recorded on OKX, Huobi, Bybit, and BitMEX.
Broader Market Context and Future Outlook
While traders patiently await a comeback of the bull run, hackers found an opportunity for profits amid the bear market.
As Ether lost over 20% of its value — from approximately $2,760 to $2,172 — funds linked to a hack on the crypto bridge Nomad in August 2022 were used to buy 16,892 Ether.
On-chain activity showed that hackers bought ETH at low prices and siphoned it through the crypto mixer Tornado Cash to prevent traceability.
Conclusion: Navigating Market Volatility
The recent market downturn highlights the volatility inherent in the cryptocurrency market and the significant risks faced by traders. As the global economy continues to show signs of weakness, investors should remain cautious and consider the broader economic context when making investment decisions.
解説
- Liquidation: The forced sale of assets when a trader’s position falls below the margin requirement, often leading to significant losses.
- Leveraged Positions: Trades that use borrowed funds to increase the potential return on investment, which also increases the potential risk.
- Bear Market: A prolonged period of declining prices in a financial market, typically marked by a decline of 20% or more from recent highs.
- On-chain Activity: Transactions and movements of assets that occur on a blockchain network, providing insights into market behavior and trends.
- Crypto Mixer: A service that anonymizes cryptocurrency transactions by mixing different users’ coins together, making it harder to trace the origins of the funds.
Understanding these key terms and the current market dynamics can help investors navigate the challenges and opportunities in the volatile world of cryptocurrency trading.