Bitcoin's second quarter started on a rocky note, with the options market once again serving as a harbinger of sharp moves, particularly a downward bias in risk reversals. Bitcoin plummeted from a high of $70,000 to $65,500 at one point.
During the same period, Ethereum's value fell to a low of $3,320.
Q2 begins with dramatic price movements
The latest market update from QCP Capital said the “speed of movement” was driven by large-scale liquidations, particularly on platforms such as Binance, which is known for its strong retail presence. This effectively reduced the permanent funding rate from a staggering 77% to equilibrium. This correction brought the spot price back to within the $60,000 to $72,000 range.
“The speed of this movement is due to the large-scale liquidations of retail-focused exchanges like Binance, which caused Purp’s funding ratio to drop from as high as 77% to flat. Spot prices return to the middle of the 60,000-72,000 range. National pension funds are being compressed, but the remaining forward curve remains very upward.”
The rise in volatility within a 24-hour period coincided with a spike in liquidation events on centralized exchanges and Bitcoin's retreat below $66,000. Data compiled by CoinGlass reveals that approximately $500 million in liquidations occurred across multiple centralized cryptocurrency exchanges. Of this, nearly $390 million is comprised primarily of long positions, with the remainder comprised of short positions.
155,000 traders were liquidated in the last 24 hours. Meanwhile, the single largest liquidation order on OKX was for ETH-USD-SWAP with an amount of $7.48 million.
Bitcoin and Ethereum suffer from mass liquidation
Bitcoin positions suffered the most losses, facing liquidations of more than $242 million during the same period. Approximately $90.68 million was attributed to long positions, while short positions accounted for $40.25 million. Ethereum also experienced a large liquidation, totaling $81.52 million, with long positions totaling $65.03 million and short positions totaling $16.49 million.
Other top altcoins experienced similar annihilation. For example, Mr. Solana's liquidation amount is just over $15 million of his $13 million, the majority of which is made up of long positions. Meanwhile, the $2.06 million short was liquidated. Dogecoin was next with a liquidation amount of $14.76 million.
