Over the last 24 hours, crypto markets experienced losses of over $82 million. These losses were suffered by traders in crypto futures who were expecting a downturn in the crypto markets.
Of the total of $82 million in losses racked up, $25 million were accounted for by bitcoin-backed futures. Available data on Coinglass reveals that the majority (64%) of traders in crypto futures were expecting that the prices would fall.
Another trend that was observed was the liquidation of longs. The net worth of the longs liquidated amounted to $45 million. When traders, partially or fully, lose their initial margin – exchanges close the trader’s leveraged position. This action is meant to be a safety measure.
Monetary Policy – Effects
Such a measure is quite routine for trading in futures. This is because as opposed to spot trading, futures markets track asset prices. In spot trading, traders actually own the assets.
The US Fed recently announced that it was planning to soon raise interest rates to combat rising inflation. In response, BTC rose to $43,000. Also, several altcoins gained in value by upto 19%.
The shift in the prices of crypto assets in response to the Fed’s announcement is not surprising. BTC is seen by many, to be akin to owning stocks – a risky asset. Others see it as a hedge against inflation.
However, the unexpected announcement by the Fed still caught many by surprise. Traders lost $15 million on BTC-backed futures on Binance. Also, liquidations on OKEx amounted to $11 million.
In addition to the losses with BTC, ETH traders were faced with losses of $31 million. Altcoins – Dogecoin and Near, both faced losses of $6 million through liquidations.