👀 Ones to watch: The MOST undervalued stocks to buy right nowSee Undervalued Stocks

Sudden Bitcoin Volatility Wipes Out $1B in Open Interest

Published 04/28/2023, 06:58 AM
Updated 04/28/2023, 07:00 AM
© Reuters.  Sudden Bitcoin Volatility Wipes Out $1B in Open Interest
BTC/USD
-
BTC/USD
-

  • Bitcoin experienced sudden volatility on Wednesday, April 26, 2023.
  • The flagship cryptocurrency dropped by almost $3,000 in less than three hours.
  • The Bitcoin market liquidated $175 million worth of futures positions and wiped out up to $1 billion in open interest within 24 hours.

Bitcoin experienced sudden volatility on Wednesday, April 26, 2023. During this period, the flagship cryptocurrency dropped by almost $3,000 in less than three hours, impacting both long and short positions held by traders.

BTC/USD 3H Chart on TradingView

According to reports, the overall impact of this sudden volatility spread to a broader segment of the Bitcoin market, liquidating as much as $175 million worth of futures positions and wiping out up to $1 billion in open interest within 24 hours.

Sudden spikes resulting from market volatility are the bane of long-term positions. Under such circumstances, open trades whose margins get exhausted or highly depleted are closed automatically by exchanges and trading platforms.

The recent volatility experienced in the Bitcoin market spiked both ways. The price dropped extensively and liquidated several long positions. The price bounced, after activating sell-limit orders, only to spike high and have them liquidated. Only trades with high margins and extended risk exposures survived the volatility.

Reportedly, the crypto exchange OKX had over $52 million in Bitcoin liquidations on its platform, while Binance liquidated orders worth $38 million. The most substantial single liquidation was on BitMEX, with a BTC/USDT trade valued at $6 million forcefully closed.

Last Wednesday, the expectation of favorable monetary policies in the U.S. pushed Bitcoin above the $30,000 psychological level. That move didn’t last long, as a sudden sale pushed the price down to $27,242 in just a few hours. The price capitulation resulted from rumors of the U.S. government selling Bitcoin seized from the infamous Mt.Gox exchange. Arkham Intelligence, the on-chain firm that initially sent out the alert, later debunked the rumor.

Bitcoin has recovered the losses of the past 24 hours and appears to have resumed its upward trajectory. As of the time of writing, BTC traded at $28,939 after reaching a daily high of $29,483.

The post Sudden Bitcoin Volatility Wipes Out $1B in Open Interest appeared first on Coin Edition.

See original on CoinEdition

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.