First Mover: Crypto Futures Saw Record $10B Worth of Liquidations

Everything you need to make sense of the crypto markets and beyond

By the CoinDesk Markets Team

Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets

April 19, 2021

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Market Moves

by Omkar Godbole

Crypto Futures Saw Record $10B Worth of Liquidations

The crypto futures market saw the highest amount of liquidations in history on Sunday, as the sudden bitcoin (BTC) price pullback caught overleveraged traders off guard.

Exchanges offering crypto futures liquidated $10 billion worth of positions on Sunday, toppling the previous market-wide record of $5.77 billion registered on Feb. 23, according to data provider bybt.

Forced closure of long positions or bullish trades accounted for $9.26 billion or over 90% of total liquidations, which shows that the leverage was excessively skewed bullish across the board.

Bitcoin futures accounted for more than 50% of total market-wide liquidations on Sunday. Liquidations happen when trades cannot fulfill margin requirements for holding long/short positions and often exacerbate bullish/bearish moves.

Crypto futures liquidations (Source: bybt)

Bitcoin dropped sharply from $60,000 to $52,148 early Sunday, dragging alternative cryptocurrencies lower. As prices started falling, margin requirements increased, and exchanges liquidated longs (squared off with offsetting shorts), adding to downward pressure in the market.

The massive forced closure of longs pushed bitcoin futures into backwardation – a market condition where futures trade at a discount to the spot price.

Bitcoin futures three-month rolling futures basis (spread between futures and spot prices) (Source: Skew)

As seen above, bitcoin futures listed on Binance and Kraken traded at a bigger discount than the ones listed on other exchanges, showing the dump mainly happened on Binance and Kraken.

The situation has normalized with futures drawing higher prices than the spot price. Bitcoin is currently trading near $56,700 – up 8% from Sunday’s low, according to CoinDesk 20 data.

The cryptocurrency may have received a boost from signs of China is softening its stance on cryptocurrencies. On Sunday, Li Bo, deputy governor of the People’s Bank of China, called bitcoin and stablecoins “investment alternatives”.

Read the original story here:

Crypto Futures Saw Record $10B Worth of Liquidations on Sunday

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Technician's Take

by Damanick Dantes

Bitcoin Stabilizes After Weekend Selloff; Resistance Around $59K

The near 15% price drop in bitcoin (BTC) over the weekend triggered oversold readings on intraday charts. Buyers were able to maintain short-term support around $55,000, although there is strong resistance around $58,000-$59,000.

The four-hour BTC chart shows resistance levels and RSI (Source: TradingView)

Original story found here:

Bitcoin Stabilizes After Weekend Selloff; Resistance Around $59K

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ICYMI

In case you missed it, here's the most recent episode of "First Mover" on CoinDesk TV:

CEO of Turkey’s Largest Crypto Exchange Comments on Country’s Crypto Payments Ban; Markets Analysis

"First Mover" dives into a developing story with implications for crypto markets worldwide: Turkey's Ban on Crypto Payments. Özgür Güner, CEO of crypto exchange BtcTurk, Turkey's largest, discusses the immediate market reaction, chances of the ban's success, and reasons he's convinced crypto adoption will continue in Turkey. Also, USA CEO Joel Edgerton of bitFlyer joins our markets discussion. And, Dante Disparte, Circle's new Chief Strategy Officer, shares his thoughts on Turkey, stablecoins, and the Diem (formerly Facebook's Libra) project that he previously championed as head of policy at the Libra Association.

A message from CoinDesk

Can't Beat Them? Join Them: Why Crypto Company Anchorage Became a Bank

Perhaps the old adage "every tech company wants to be a bank — someday, at least" is true. But why would a crypto company, given Bitcoin's philosophical roots, want to become a bank? And what does a crypto bank even look like, let alone do?

Join us for a chat with leaders from Anchorage, the OCC and the Blockchain Association for an inside look on why and how Anchorage became the first crypto company to secure an OCC bank charter.

We'll dive deeper into the topic at Consensus by CoinDesk, our big-tent event May 24-27.

Join us on Clubhouse on April 20 at 5 p.m. ET.

Latest Headlines

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Regulators are “creating danger” for investors in their inconsistent approach to determining how to treat cryptocurrencies.

Digital Assets Firm Taurus to Launch Securities Marketplace After Getting Swiss License

Switzerland's financial regulator has green lighted Taurus' digital securities platform and is now expected to launch next month.

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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.

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