Crypto tracking futures have accumulated over $550 million in losses in the last 24 hours as Bitcoin (BTC) surged from the $68,000 mark and then plunged – causing volatile price action that Bulls and bears alike were amazed.
Bitcoin and Ether (ETH) briefly rose above $68,500 and $3,700, respectively, as euphoria continued into the second week via multiple catalysts. But profit-taking began in the early hours in Asia, with Bitcoin falling as low as $64,500 before hitting $67,000 again.
The broader CoinDesk 20 index (CD20) rose over 6%.
Long positions, or bets on higher prices, lost over $240 million, while short positions, or bets on lower prices, lost $320 million in positions.
Futures tracking Dogecoin (DOGE), Shiba Inu (SHIB) and Pepecoin (PEPE) lost a total of $90 million across all exchanges in a highly unusual move. Bullish bets on DOGE reached a lifetime high last week, contributing to its 110% weekly move.
A liquidation occurs when an exchange forcibly closes a trader's leveraged position due to a partial or complete loss of the trader's initial margin. Large liquidations can signal the local high or low of a steep price move, potentially allowing traders to position accordingly.
Traders widely expect Bitcoin to surpass its lifetime highs before the April halving, while a spot Ether exchange-traded fund (ETF) is also expected to be approved in May.
As a result, some funds expect leverage to increase in the coming days as Bitcoin approaches its lifetime high of $69,000.
“Leveraged buyers are unlikely to budge until we break through all-time highs, which could happen at any time,” crypto fund QCP Capital said in a broadcast on Telegram on Tuesday. “This is a similar magnitude of leverage to 2021, pushing the front end of the curve up and keeping the back end elevated.”
Data shows leveraged bets on crypto futures rose to over $66 billion last week, while funding rates for some tokens rose to over 100% on an annual basis. Financing is the amount traders pay when they borrow additional money to make larger deals.
Meanwhile, some analysts view the unusually large moves in SHIB tokens as a broadly bearish signal, as meme coin outperformance has historically marked local highs for Bitcoin on speculative bullishness.