Cryptocurrency-tracking futures suffered losses of more than $550 million over the past 24 hours as Bitcoin (BTC) jumped and then fell from the $68,000 level — triggering price swings that stunned bulls and bears alike.
Bitcoin and Ethereum (ETH) briefly rose above $68,500 and $3,700 respectively, as the euphoria caused by multiple catalysts continues into its second week. But profit-taking began in the early Asian hours, with Bitcoin falling to a low of $64,500 before recovering to the $67,000 level.
The broader CoinDesk 20 index (CD20) rose more than 6%.
Long trades, or bets on high prices, lost more than $240 million, while short trades, or bets on low prices, saw $320 million in positions evaporate.
Futures contracts 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 an all-time high last week, contributing to its weekly move of 110%.
Liquidation occurs when the exchange forcibly closes a leveraged trader's position due to partial or total loss of the trader's initial margin. Large liquidations can indicate a local top or bottom of a sharp price movement, which may allow traders to position themselves accordingly.
Traders widely expect Bitcoin to surpass all-time highs ahead of the April halving event, while there are also expectations that an Ethereum spot exchange traded fund (ETF) will be approved in May.
As such, some funds expect leverage to increase in the coming days as Bitcoin approaches all-time highs of $69,000.
“Leveraged buyers will likely not relent until we break their all-time highs, which could happen any time now,” cryptocurrency fund QCP Capital said in a Tuesday broadcast on Telegram. “This is a similar amount of leverage to what we saw in 2021, pushing the front end of the curve higher and keeping the back end higher.”
Bets on cryptocurrency futures increased to more than $66 billion last week, Show data, while funding rates on some tokens have risen to more than 100% annually. Funding is the amount traders pay when they borrow additional money to make larger trades.
Meanwhile, some analysts consider the unusually large moves in SHIB tokens to be… Overall bearish signalAs meme coin outperformance has historically determined local peaks for Bitcoin due to speculative froth.
