Bitcoin Bulls Take BTC To $66,000, $130M Crypto Shorts Rekt

Data shows the cryptocurrency derivatives sector has suffered a lot of liquidations as Bitcoin has rallied to the $66,000 mark.

Bitcoin Has Now Recovered To The $66,000 Level

The past day has been a great time for Bitcoin investors as the price has shown a sharp recovery surge, which has taken it to the $66,000 level for the first time since the end of last month.

The below chart shows what the asset’s recent price action has been like.

The graph shows that this 6% surge in the last 24 hours means that Bitcoin is now not too far from surpassing the high from September. Breaking that top would take the asset to the highest level since July.

Like it’s usually the case, BTC hasn’t been alone in this rally, as the rest of the sector has followed in its lead. Coins like Ethereum (ETH) and Solana (SOL) have even outperformed the original digital asset, with 8% and 7% jumps, respectively.

With all the volatility in the market during the past day, it’s not surprising that the derivatives side has seen a shakeup.

Crypto Derivatives Has Seen $233 Million In Liquidations Today

According to data from CoinGlass, a large amount of liquidations have occurred in the cryptocurrency derivatives market over the last 24 hours. A contract is said to be ‘liquidated‘ when it’s forcefully closed by its platform after it has exceeded losses of a certain degree.

Here is a table that shows the relevant numbers related to the latest mass liquidation event:

Looks like the latest derivatives flush has been short-dominated | Source: CoinGlass

As is visible above, around $233 million in derivatives contracts related to all cryptocurrencies have found liquidation during this window. This flush was almost entirely short contracts, as these investors betting on a bearish outcome took a $198 million beating, equivalent to almost 85% of the total liquidations.

In terms of the individual symbols, Bitcoin has predictably come out on top, with almost double the liquidations of second-placed Ethereum. Though, while BTC’s share is the highest in the sector, it represents just 39% of the total, implying that altcoins have enjoyed a faire share of their own speculation recently.

The distribution of the latest liquidations by symbol | Source: CoinGlass

Out of the assets other than BTC and ETH, Solana has seen the highest amount of liquidations at around $11 million. SUI and NEIRO have rounded off the top 5 with $7 million and $5 million in contracts, respectively.

A mass liquidation event like today’s is popularly called a squeeze and since this latest event involved a dominance of shorts, it would be known as a short squeeze.

During a squeeze, liquidations feed back into the price move that caused them, thus elongating it and unleashing a flurry of further liquidations. This is why these events tend to be so volatile.

Featured image from Dall-E, CoinGlass.com, chart from TradingView.com