Bitcoin (BTC) and Ether (ETH) rallied 10% over the past 24 hours to recoup all of the weekend’s losses after crypto markets tumbled following problems at Silicon Valley Bank (SVB) on Friday night.
Bitcoin rose slightly above $22,500 in Asian morning hours on Monday, while ether regained the $1,600 level, according to Coingecko. The move came as USD Coin (USDC) issuer Circle said on Sunday it would cover any shortfall in reserves, while federal regulators said SVB depositors will have access to all funds Monday morning after the US open.
Traders betting on a market-wide decline were caught off guard when a broader market rally in the past 24 hours saw $183 million in shorts, or bets against price gains, liquidated.
Short traders made nearly 85% of all liquidations in the past 24 hours, Coinglass data shows.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It occurs when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open).
Large liquidations can signal the local top or bottom of a steep price movement – which can allow traders to position themselves accordingly.
Liquidations on ether futures passed $78 million, the most among all crypto futures, followed by bitcoin futures at $68 million. Such activity may have contributed to an overall market rise as shorts capitulated their positions.
Futures for other major tokens saw relatively smaller losses, suggesting the move was spot-driven. Optimism (OP) and solana (SOL) took $4 million in losses each, followed by litecoin (LTC) and aptos (APT) futures at $3 million.
Binance saw $75 million in short liquidations, the most among exchanges, followed by OKX at $47 million.