The crypto markets got hit with a new round of selling Tuesday afternoon (as of 15:21 UTC), as bitcoin (BTC), ethereum (ETH), and many altcoins fell by double-digit percentages in less than two hours.
At press time, bitcoin was down by 8.7% over the past 24 hours, and traded at USD 46.2k, per CoinGecko’s price data. However, that’s still up significantly from the low of just over USD 42,900 that was seen on Binance earlier in the selloff, and the USD 42,850 seen on Coinbase.
The sharp moves lower also led to large liquidations on derivatives exchanges, with more than USD 2.7b liquidated in just one hour across all exchanges and trading pairs, per data from Bybt.com.
Looking at data from Skew, massive liquidations of overleveraged positions could also be seen in the bitcoin market, with more than USD 750m liquidated in one hour for bitcoin alone.
Leveraged trading refers to borrowing funds so that you can take a larger position than you would be able to with your existing funds so that you can potentially generate a higher profit. However, while margin trading enables traders to amplify their returns, it can also lead to increased losses and liquidations, which is why experienced traders tend to advise newcomers to stay away from leveraged trading.
Despite derivatives trades getting rekt, however, El Salvador’s president and bitcoin proponent Nayib Bukele wrote on Twitter that his country is “buying the dip”:
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(Updated at 15:57 UTC with a paragraph about the leveraged trading.)