Crypto market sees $295 million in liquidations across exchanges over past 24 hours

Bitcoin has been beset by heavy selling pressure in the past 24 hours, causing the digital asset to fall below the $60,000 support level and reaching a recent low of around $57,800.

There were over $77 million in bitcoin long liquidations across centralized exchanges in the past 24 hours — out of a total of $92 million in liquidated BTC positions, according to data from Coinglass. The broader cryptocurrency market saw over $295 million in liquidations on centralized exchanges, with around $259 million in long positions.

Ether, the second-largest cryptocurrency, also faced significant liquidations, with over $71 million liquidated — of which $62 million were long positions.

Liquidations happen when a trader’s position is automatically closed due to insufficient funds to sustain it, typically caused by market fluctuations that erode their initial margin or collateral.

Despite a recent drawdown in the cryptocurrency market, derivatives traders are positioning for price increases in the coming months, particularly for ether, analysts said.

According to QCP Capital analysts, "the options market is still optimistic as we continue to see interest heavily skewed towards ether calls for September and December expiries."

Thursday's QCP Capital report expanded on the factors that could cause prices to break out of the current downtrend. The analysts offered two dynamics that could drive a reversal in a further price correction. "Liquidation clusters on bitcoin and ether are heavily skewed to the topside, opening up potential short squeezes," the QCP Capital analysts added.

They also said that spot Ethereum exchange-traded fund (ETF) S-1 form approvals are incoming, and that "an approval may result in a hard bounce in ether." The report added that given the recent sell pressure on bitcoin, driven by factors like Mt. Gox, and signs of miner capitulations, ether has the potential for a stronger rebound.

The QCP Capital market report stressed that bitcoin miners are showing signs of capitulation. "Historically this has been associated with a bottom in prices with the last comparable hash rate draw down occurring in 2022 when bitcoin traded to $17,000."

According to a CryptoQuant report on Wednesday, there are various signs of miner capitulation, which historically has indicated a bottom in prices. The report noted that for most of the period since April, miners have been "extremely underpaid" according to the data provider's metrics. CryptoQuant said that total daily revenues for miners have decreased from $79 million on March 6 to $29 million currently.