Bitcoin (BTC) plunged to $ 27,700 and bounced back seconds later, shocking some and financial ruin for others, data shows.
According to on-chain analytics resource Glassnode, long futures traders lost a total of $ 190 million in one hour in Binance alone – the most in history.
One exchange, 60 minutes, $ 190 million
The numbers underscore the current face of Bitcoin as it orbits new all-time highs and, along with Ether (ETH), becomes the hottest ticket of 2021.
Longs had had near-unbridled success for much of December 2020 and into the new year, with little resistance from the uptrend.
Despite warnings from various analysts that the bull run could not go on uninterrupted forever, many traders took a significant risk and bet heavily on new highs. In this case, $ 34,800 marked a final high and BTC / USD subsequently lost $ 7,000 in 24 hours, including $ 4,000 in less than 60 minutes on Monday.
Diagram annotated with Bitcoin Futures Long Liquidations (Binance). Source: Glassnode
The result for those who were overfunded was clear to see.
“USD 190,000,000 (in long positions) were liquidated within 10 minutes at #Binance. Biggest value to date,” commented Glassnode alongside a chart showing Binance’s liquidations.
Risk versus reward
As Cointelegraph reported last week, it was short positions that got into mass liquidation when Bitcoin broke through $ 30,000 for the first time. This episode, short traders lost a combined $ 100 million across exchanges.
“Get used to 5,000 dips when we get to $ 100,000. Coming with the Territory,” summarized Samson Mow, chief strategy officer of Bitcoin technology company Blockstream, on Twitter, while the volatility persisted.
The trading of derivatives linked to Bitcoin and Ether, meanwhile, shows no signs of declining popularity. CME Group, one of the pioneers in Bitcoin futures, will launch Ether futures in the first quarter of this year.