- Nearly $25 million in Bitcoin longs have been liquidated on BitMEX in the last 24-hours.
- Bitcoin is currently trading at $10,400.
Despite briefly touching the $11,000 level, Bitcoin has since retraced to the $10,400 level. Bitcoin’s decline resulted in a massive wave of short liquidations. According to cryptometer.io, nearly $25 million in Bitcoin longs have been liquidated on BitMEX in the last 24-hours.
Bitcoin long positions allow traders to bet on Bitcoin’s price rising in the future. Some traders also utilize leverage which can amplify gains but also amplify losses at the same rate.
Leverage trading allows traders to leverage greater trading power. For example, to open a 1 Bitcoin position with 5x leverage, the trader only contributes 0.20 Bitcoin to the position and borrows the rest. By doing so, the trader has the trading power of one whole Bitcoin and, therefore, amplifies potential returns on the 0.2 Bitcoin by approximately 5x.
While leverage trading can help traders amplify gains, it can also amplify losses at the same rate. For example with 5x leverage, a 20% move in an opposite direction may result in liquidations and the trader losing their entire initial contribution to the position. Therefore, traders trading with large amounts of leverage may face liquidations during price fluctuations.
Disclaimer: Content displayed on thecryptoassociate.com is not investment advice. Investors should do their own research before investing in digital assets or anything displayed on this site. The Crypto Associate does not recommend trading any sort of investment in cryptocurrencies and digital assets. The Crypto Associate is not responsible for any losses incurred due to the buying or selling of cryptocurrencies displayed on this site. All content is for informational purposes only. The Crypto Associate does not endorse, affiliate or represent any third-party links including advertisements. The Crypto Associate participates in affiliate marketing. Read the full disclaimer