Investors of crypto futures lost over $400 million on Wednesday as major cryptocurrencies fell below support levels in response to the US Federal Reserve’s hawkish statements.
On Jan. 21, nearly a billion dollars in losses from liquidations were reported and $470 million on Jan. 22, the results on Wednesday were the third-highest of 2022. Bitcoin dropped from $47,000 to $42,500.
Liquidations occur when a trader’s leveraged position is forced closed by an exchange as a safety measure. This typically occurs in futures trading, which simply follows asset prices rather than spot trading, in which traders control the real assets.
Futures tracking Solana’s SOL and Dogecoin’s DOGE witnessed a combined $40 million in liquidation losses. Meanwhile, the GMT tokens of StepN, a month-old crypto project, were an outlier on the list, with $9 million in losses.
DOGE and GMT were among the best performers of last week. DOGE prices rose on expectations that Elon Musk’s appointment to Twitter board of directors would be a favourable stimulus for Dogecoin’s growth, while traders flocked to Stepn for its innovative step-to-earn strategy.
Bitcoin futures lost the most money, $92 million, followed by ether futures, which lost $64 million. On Thursday, the losses continued into the Asian hours, with over $40 million in liquidations documented at the time of writing.
According to a source, about $133 million was lost due to liquidations on the crypto exchange Binance. With losses of $100 million and $68 million, traders on OKX and FTX were the next worst hit.
