Traders in super-advanced positions feel the pain once again as volatility eliminates large amounts of value in minutes.
Bitcoin’s fall in price to $27,000 cost BinanceNOTÍCIAS DO MARCADO traders $190 million
The Bitcoin (BTC) fell to US$27,700 and recovered seconds later it was a shock for some and financial ruin for others, the data show.
According to Glassnode’s on-chain analytical feature, futures traders with long positions lost a total of US$190 million at Binance alone in a single hour – the most in history.
One exchange, 60 minutes, US$190 million
The numbers highlight the current face of Bitcoin, as it Crypto Trader revolves around new historical records and, together with Ether (ETH), becomes the hottest ticket of 2021.
Purchased positions were almost unrestrained throughout much of December 2020 and in the new year, these positions had little resistance.
Despite warnings from several analysts that the bullish run could not last forever, many investors took substantial risks, betting heavily on new continuing highs. In the event, $34,800 marked a definitive high, with the BTC/USD subsequently losing $7,000 in 24 hours, including $4,000 in less than 60 minutes on Monday.
Bitcoin Futures Long Settlement Chart (Binance). Source: Glassnode
The result for those who were overtaken was easy to see.
“US$190,000,000 (in long positions) were settled at #Binance in 10 minutes. The highest figure to date,” Glassnode commented next to a graph showing the #Binance settlements.
Risk vs. Reward
As the Cointelegraph reported last week, it was the short positions that were liquidated en masse when Bitcoin ripped $30,000 for the first time. This episode lost the operators of $100 million in exchanges.
“Get used to drops of 5,000 as we move to $100,000. It comes with the territory,” Samson Mow, strategy director for the Bitcoin Blockstream technology company, summarized on Twitter as the volatility continued.
Derivatives trades linked to Bitcoin and Ether, however, show no signs of losing popularity. CME Group, one of the pioneers in Bitcoin futures, is expected to launch Ether futures in the first quarter of this year.