{"id":26302,"date":"2024-03-06T11:25:38","date_gmt":"2024-03-06T11:25:38","guid":{"rendered":"https:\/\/marketmakersjournal.com\/index.php\/2024\/03\/06\/cryptocurrency-market-correction-triggers-1-billion-closure-of-leveraged-futures-bets\/"},"modified":"2024-03-06T11:25:38","modified_gmt":"2024-03-06T11:25:38","slug":"cryptocurrency-market-correction-triggers-1-billion-closure-of-leveraged-futures-bets","status":"publish","type":"post","link":"https:\/\/marketmakersjournal.com\/2024\/03\/06\/cryptocurrency-market-correction-triggers-1-billion-closure-of-leveraged-futures-bets\/","title":{"rendered":"Cryptocurrency Market Correction Triggers $1 Billion Closure of Leveraged Futures Bets"},"content":{"rendered":"

Bitcoin (BTC)<\/a>\u2018s recent price correction, following its surge to a new all-time high above $69,000, has resulted in the closure of leveraged perpetual futures bets worth $1 billion across digital asset markets.\u00a0<\/span><\/p>\n

On Tuesday, the leading cryptocurrency experienced a 10% drop, falling to $59,700, prompting a significant clearing of excess leverage from the market.<\/span><\/p>\n

According to data by CoinGlass, long and short traders\u00a0<\/span>suffered<\/span><\/a>\u00a0more than $1 billion in losses across major centralized exchanges over the past 24 hours.<\/span><\/p>\n

More specifically, 296,908 traders have been liquidated, with the total long liquidations coming in at $817 million and short liquidations coming in at around $234 million.<\/span><\/p>\n

Crypto exchange Binance<\/a> took the lion\u2019s share of these liquidations at over $401 million, followed by OKX<\/a> at $367 million and Bybit at around $104 million.\u00a0<\/span><\/p>\n

Bitcoin-tracked futures experienced $309 million in both short and long liquidations over the past day while Ethererum-linked futures saw over $185 million in liquidations.\u00a0<\/span><\/p>\n

Price Corrections Normalizes Funding Rates<\/span><\/h2>\n

<\/span>
\nThe recent correction has had a normalizing effect on the funding rates in the crypto perpetual futures market.\u00a0<\/span><\/p>\n

Annualized funding rates, which represent the cost of holding leveraged bets in perpetual futures tied to the top 25 cryptocurrencies, have now decreased to less than 20%.\u00a0<\/span><\/p>\n

This is a substantial decline from the triple-digit figures observed just days ago.<\/span><\/p>\n

The cooling of the overheated perpetual futures market paves the way for a more sustainable upward move towards new record highs.\u00a0<\/span><\/p>\n

Funding rates had surged above 100% earlier in the week as Bitcoin\u2019s strong bullish momentum attracted investors who sought to maximize their gains using leveraged products.<\/span><\/p>\n

Exchanges employ the funding rate mechanism to ensure that perpetual prices align with spot prices.\u00a0<\/span><\/p>\n

A positive funding rate indicates that perpetuals are trading at a premium to the spot price, signaling increased demand for bullish bets.\u00a0<\/span><\/p>\n

Therefore, a high funding rate, as observed earlier this week, is often seen as a reflection of over-optimism, typically associated with interim market tops.<\/span><\/p>\n

Analysts Expect Bitcoin to Maintain Momentum<\/span><\/h2>\n

<\/span>
\nBitwise Chief Investment Officer Matt Hougan expects Bitcoin to\u00a0<\/span>soar beyond $80,000<\/span><\/a>\u00a0this year thanks to the recent success of spot ETFs.<\/span><\/p>\n

In a recent interview, Hougan highlighted the sustained demand for ETFs, which has exceeded his expectations.<\/span><\/p>\n

He said that this wave of interest from traditional finance, akin to Bitcoin\u2019s IPO in the US market, will lead to further institutional investment and drive up prices.<\/span><\/p>\n

Likewise, billionaire investor Mark Cuban has said that he\u00a0<\/span>invested in Bitcoin<\/span><\/a>\u00a0due to its strong capability as a store of value.<\/span><\/p>\n

\u201cThere\u2019s only going to be 21 million of [Bitcoin]. The more people that buy and the fewer people that sell, that means the price is going to go up. That\u2019s just the nature of it,\u201d he said.\u00a0<\/span><\/p>\n

\u201cIt\u2019s a great store of value. That\u2019s why I have an investment in it. Because I do feel that the demand is going to exceed the number of people selling.\u201d<\/span><\/p>\n

The post Cryptocurrency Market Correction Triggers $1 Billion Closure of Leveraged Futures Bets<\/a> appeared first on Cryptonews<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Bitcoin (BTC)\u2018s recent price correction, following its surge to a new all-time high above…<\/p>\n","protected":false},"author":0,"featured_media":26303,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[],"class_list":["post-26302","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"_links":{"self":[{"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/posts\/26302","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/comments?post=26302"}],"version-history":[{"count":0,"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/posts\/26302\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/media\/26303"}],"wp:attachment":[{"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/media?parent=26302"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/categories?post=26302"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/marketmakersjournal.com\/wp-json\/wp\/v2\/tags?post=26302"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}