Sudden Bitcoin Volatility Wipes Out $1B in Open Interest

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.

Comments

Post a Comment

Popular posts from this blog

FTX Wallet Drainer Relentless: Bridges Another 5,624 ETH to BTC

CertiK Alert posted on October 4 that the FTX drainer bridged another 5,624 ETH to BTC. That follows a series of notifications of multiple activities by the hacker, recently. The latest amount adds to over 30,000 ETH already bridged by the FTX wallet drainer. CertiK Alert, a platform that provides real-time alerts about crypto hacks, posted on October 4 that the FTX drainer bridged another 5,624 ETH to BTC. That follows a series of notifications about the recent resurfacing of the hacker who stole a significant amount of funds from the defunct FTX exchange. #CertiKSkynetAlert The FTX drainer has bridged another 5,624 ETH to BTC Receiving wallets: Bc1q8…m7zcy Bc1qs…fyhdy Bc1q7…3tg27https://t.co/4J3l9hyvjX — CertiK Alert (@CertiKAlert) October 4, 2023 The recent alert comes after CertiK Alert had posted about the hacker bridging up to 30,000 ETH to BTC as of October 2, 2023. Over the weekend, the crypto industry observed renewed activity on the w...
Read more

Here’s how to prevent NFT theft, according to industry professionals

Image
Professionals working in the Web3 space highlighted various tools and best practices to protect NFTs from hackers and scammers. As nonfungible tokens (NFTs) attract more users, they also capture the eyes of scammers. Bad actors in Web3 have set their sights on digital collectibles, with millions being lost through scams and various attacks.  However, according to professionals working in the Web3 space, there are multiple ways and tools to prevent being a victim of NFT theft . In addition, users can also take various actions after losing their digital collectibles to hacks. Ronghui Gu, the co-founder and CEO of blockchain Security firm CertiK, told Cointelegraph that the first and most important step is always due diligence. “Avoid clicking on suspicious links and be very careful when signing token approvals,” Gu shared. Taking it a step further, the executive shared other best practices like periodically checking and revoking unneeded permissions and segregating NFTs into differen...
Read more

Sell the rumors… Buy hack announcements? Unibot retrospective

In the aftermath of a significant security breach affecting Unibot (UNIBOT), an unexpected twist in market psychology surfaced. A leading analyst on prominent crypto analytics platform Santiment dissected the curious case of Unibot price action following a hack, challenging the old adage of “sell the rumor , buy the news.” He wrote: Panic creeps in, you start getting doubts (especially having experience multiple blowups of projects before), maybe it’s just better to sell and wait it out? Looks like many UNIBOT holders felt those kind of feelings in the recent days. On Oct. 31st, a capitulation event was observed for Unibot as long-standing coins changed hands in response to panic stemming from a cryptic tweet by the coin’s developers. The subsequent sell-off resulted in the largest transaction volume spike for Unibot, accompanied by a noticeable increase in active addresses — a movement tracked closely by Santiment’s tools. If you read any UNIBOT-rel...
Read more