As the price of the flagship cryptocurrency Bitcoin (BTC) endured a significant sell-off to a $95,000 low before it started recovering, liquidations in the cryptocurrency space soared to nearly $1.5 billion in 24 hours.
According to data from CoinGlass, an astounding $1.34 billion worth of long positions were liquidated over the last 24-hour period, while around $130 million worth of short positions were liquidated over the same period amid a wide cryptocurrency market downturn.
Market data shows that the price of BTC plunged from around $99,800 to a $95,000 low over the period before recovering, while most other digital assets saw similar performance. Ethereum’s Ether, the second-largest by market capitalization that has been seeing its fundamentals improve, plunged 7% in the last 24 hours, while Solana dropped 7.75% and Binance’s BNB lost 7.5% of its value.
Other leading cryptocurrencies including Dogecoin, XRP, and Cardano saw even worse declines of 9.5%, 11.8%, and 12.6% respectively. In the top 50 by market capitalization, some cryptocurrencies dropped as much as 19.7% over the last 24 hours.
The crypto market dropped by around $250 billion over the sell-off before recovering, with the 24-hour loss currently standing at around $150 billion, as the space0s total market cap is now at $3.39 trillion.
As reported earlier this month when the price of Bitcoin briefly topped the $100,000 mark, the space’s total market capitalization hit a record $3.6 trillion. The sell-off notably came as BTC’s declining dominance helped it surge past the 57% mark.
Crypto market deleveraging could be positive
It’s worth noting that a deleveraging event in the crypto market such as the one being seen, in which nearly $1.5 billion worth of leveraged positions were liquidated, could be interpreted as a positive for the market in the long term, as it reduces overall debt in the market and could make it more resilient.
Deleveraging events help create a more stable market, with reduced potential for extreme price swings that are often caused by the excessive use of leverage.
