- Nearly $30 million in Bitcoin longs were liquidated on BitMEX alone as the cryptocurrency edges back towards the $9,000 level.
- Bitcoin options open interest is recovering following the record June expiry.
Bitcoin continues to drift back towards the $9,000 range, down over 2% Thursday. Bitcoin’s move downwards triggered another wave of Bitcoin long liquidations. According to cryptometer.io, nearly $30 million in Bitcoin longs were liquidated on BitMEX in the last 24 hours.
Bitcoin long positions allow traders to bet on Bitcoin’s price rising in the future. However, many trader use leveraged positions to amplify their gains.
Through leverage, traders borrow a portion of the position and then realize gains on the entire position, including what was borrowed. However, leverage is a double-edged sword as traders can also lose massive sums of money if the price goes in the opposite direction. With leverage positions, losses are amplified at the same rate. For example, with 10x leverage, the trader will lose the entire position if the price of Bitcoin falls 10%. The Crypto Associate explained how long positions with leverage work in a prior article.
Open Interest Begins To Recover
Last Friday, The Crypto Associate reported as over $1 billion in Bitcoin options open interest expired. However, according to data by Skew, a cryptocurrency analytics platform, open interest is recovering steadily.
Open interest helps quantify market interest in a particular asset by representing the total outstanding contracts at the end of the trading day. Interestingly, Bitcoin also saw a massive contract expiry in May, but open interest recovered, reaching new highs just weeks after.
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