Crypto-Tracked Futures Market Experiences $550 Million Losses Amid Bitcoin’s Volatility
Crypto-tracked futures amassed over $550 million in losses in the past 24 hours as bitcoin (BTC) jumped, then dumped, from the $68,000 level – sparking volatile price action that stunned bulls and bears alike.
Bitcoin and Ether Witness Volatile Price Action
Bitcoin and ether briefly inched above $68,500 and $3,700, respectively, as euphoria from multiple catalysts continued into its second week. But profit-taking began in early Asian hours, with bitcoin falling to as low as $64,500 before regaining the $67,000 level.
Broader CoinDesk 20 Index Grows by 6%
The broader CoinDesk 20 index (CD20) rose over 6%.
Significant Losses and Liquidation of Positions
Longs, or bets on higher prices, lost over $240 million, while shorts or bets on lower prices saw $320 million in evaporated positions. Futures tracking dogecoin (DOGE), shiba inu (SHIB), and pepecoin (PEPE) lost a cumulative $90 million across exchanges in a highly unusual move. Bullish bets on DOGE reached a lifetime high last week, contributing to its 110% weekly move. Liquidation of leveraged positions serves as a crucial indicator for potential turning points in the market.
Expectations of Rising Leverage and Potential Milestones for Bitcoin
Traders widely expect bitcoin to cross its lifetime peaks ahead of April’s halving event, while there are also expectations of the approval of a spot ether exchange-traded fund (ETF) in May. Some anticipate increased leverage in the coming days as bitcoin approaches its lifetime highs at $69,000.
“Leveraged buyers will likely not relent until we break all-time highs, which could be any time now,” stated crypto fund QCP Capital in a Tuesday broadcast on Telegram. “This is a similar magnitude of leverage to what we saw in 2021, pushing the front-end of the curve higher and keeping the back-end elevated.”
According to recent data, leveraged bets on crypto futures increased to over $66 billion in the past week while funding rates on some tokens have exceeded 100% annualized. Funding refers to the amount traders pay when borrowing additional money to execute larger trades.
Meanwhile, the unusual surge in SHIB tokens is raising concerns among analysts, as meme coin outperformance has historically signified local tops on bitcoin due to speculative froth.
