Traders lost more than $174 mln in a day due to cryptocurrency price spikes

Traders lost more than $174 mln due to cryptocurrency price hikes

Increased volatility on the market led to forced closures of both long and short positions

The amount of liquidations of traders' positions on cryptocurrency exchanges over the past day amounted to more than $174 million, according to the Coinglass service. A total of 85.5 thousand positions were liquidated, and the largest single liquidation occurred on the BitMex exchange for $3.86 million.

If during margin trading the quotes went in the wrong direction, the trader starts to incur losses. Losses reduce the amount of margin, and when it decreases to a critical value, the trader receives a notice from the broker about the need to replenish the account. This notification is called Margin Call. If the account is not replenished and losses continue to grow, the broker will automatically close the positions opened earlier by the trader.

What is Margin Call and how to avoid it

Increased market volatility led to forced closures of both long ($122.9 mln) and short positions ($51.2 mln). This included liquidating orders worth over $29 million in bitcoin (BTC) and nearly $26 million in Ethereum (ETH).

According to Coinmarketcap, the total capitalization of the crypto market fell by 1.62% in the last 24 hours. Of the largest altcoins by capitalization, Solana (SOL) saw the strongest decline of 5.43%, Polkadot (DOT) by 4.96% and Avalanche (AVAX) by 6.67%. Cardano (ADA), Dogecoin (DOGE) and Chainlink (LINK) show a 3-4% drop on average.

Among altcoins, the most positions were liquidated on Solana (SOL) - $12.33 million, Memecoin (MEME) - $9.56 million and Ripple (XRP) - $7.21. Among exchanges, Binance ($5 million), OKX ($2.58 million) and Bybit ($1.11 million) lead the way in terms of forced liquidations.