South Africa

Crypto Crash Catches Leveraged Bubbleheads Off Guard, Over $10 Billion in Liquidations on Sunday

Isheka N. Harrison

Written by Isheka N. Harrison

Apr 19, 2021

Crypto Crash
Crypto Crash Catches Leveraged Bubbleheads Off Guard, Over $10 Billion in Liquidations on Sunday. XRP (Ripple), Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). Photo: STRF/STAR MAX/IPx 2021 2/14/21

There was a major crypto crash on Sunday, and it caught many overleveraged traders off-guard. According to an article on Coindesk, the crypto futures market saw its highest number of liquidations in history, with $10 billion worth of positions being lost.

Bitcoin futures made up over 50 percent of market-wide liquidations, according to reports. Its value took a hefty drop from $60,000 to $52,148 causing a domino effect with other cryptocurrencies. Much of the loss was due to long positions and bullish trades.

“This [downward] move was definitely driven by the vast amount of futures being liquidated,” Viktor Franken, an options trader at Orca Traders, told CoinDesk in a Telegram chat. “Additionally, it was a weekend, and liquidity was thin during the early Asian hours.”

Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin

Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?

Binance and Kraken offered the biggest trading discounts after the crash. “On Binance, the drop was so bad that you were able to pick up long-term futures at prices well below the spot market,” Adam Cochran, a partner with Cinneamhain Venture, wrote in a tweet. “While spot [markets] dipped to $51,000, futures were trading in the low $40,000.” 

While the overleveraged buyers were taken aback, Alamedo crypto trader Sam Trabucco said he saw the crash coming.

“I’ve seen a lot of complex theories for why crypto *started* crashing, but I don’t think you really need ’em,” Trabucco wrote in a Twitter thread explaining his take on what happened. “BTC rallied from 60k -> 65k in the days pre-COIN, fell to 62k quickly, and then … well, fell to 60k over the next weekend. Kinda no biggie and exactly what I’d expect?”

The situation has now stabilized and analyst Ipek Ozkardeskaya said that should bring traders some solace.

“The fact that we’ve seen strong buying interest near the psychological $50,000 mark should be a relief for bitcoin bulls following the weekend plunge,” Ozkardeskaya told CoinDesk.

Football news:

Milan can invite Sarri if the team does not qualify for the Champions League
They want to allow 25 thousand people to attend the Champions League final. Chelsea and City fans will receive 4 thousand tickets each
Michael Owen: Mount and Foden will be the best players in the world. Phil can be one of the best in the history of England
Zinedine Zidane: Hazard has to play, he has to get his confidence back. He has to rebuild the old version of himself
Gary Lineker: It was the weakest Real I've ever seen. Chelsea are better by a million miles
Iniesta believes that Barcelona will take La Liga: They are able to win all the remaining matches
Chelsea Tuchel vs top coaches: 7 wins, 1 draw, 1 goal conceded