REKT: Long Liquidation Reaches $175 Million in Four Hours
The crypto futures market experienced a sharp turmoil, marked by the liquidation of long positions worth over $175 million in just four hours. This massive liquidation event, known as "REKT," indicates a rapid and significant price decline, trapping traders who bet on rising prices (bullish) with high leverage.
Impact of Liquidation: The liquidation of long positions worth $175 million in a short period signifies a sudden downward market movement, forcing the automatic closure of futures contracts due to traders' margins being insufficient to cover losses.
Sudden Volatility: This incident is often exacerbated by the high leverage used by traders. The sharp price drop triggers forced closures, which then creates cascading selling pressure, accelerating further price declines.
Market Indications: According to data from other sources, significant long liquidations like this—such as a recent flash crash where over $204 million in positions were liquidated within 60 minutes—are often caused by high open interest (number of open contracts) and low liquidity (especially on weekends), rather than by clear fundamental factors or bad news. This reflects a market driven by leverage (speculative market).
Looking at the attached market heatmap, it appears that Bitcoin (BTC) and Ethereum (ETH) account for the majority of trading volume in the crypto market ($40.97 Million and $87.98 Million), indicating that most long liquidations are likely centered around these two major assets.
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