Most affected were traders of futures a futures contract is a standardized legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. contracts based on digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currencies, whose leveraged positions were automatically liquidated when the price of Bitcoin the biggest and most popular cryptocurrency in the world. It is a decentralized digital currency that enables users to make trustless peer-to-peer transactions. and other major altcoins fell sharply this December 28th.
It seems that the drop seen in the price of major cryptocurrencies not only inconvenienced users of the more traditional crypto markets, as it also led to the liquidation liquidation refers to the conversion of an asset or cryptocurrency for fiat or its equivalents. of nearly $300 million worth of futures contracts on a number of platforms.
USD $300 million in settlements after price slump
This is reflected in data published by the analysis tool Coinglass, which indicates that at least 109,000 contracts were liquidated in the last 24 hours, of which some USD $94 million was directly associated with the fall in the price of Bitcoin which a day ago surpassed USD $52,000 per unit.
A comparison carried out by the team of CoinDesk reveals that a similar situation arose just at the beginning of this month of December, since when Bitcoin fell to USD $41,000 per unit and a large number of contracts were also liquidated, resulting in losses estimated at over USD $435 million at the time.
Settlement of Cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. Futures Contracts
While position closures are a common mechanic in certain markets, in the case of platforms that operate based on the price of digital currencies, they tend to automatically close refers to the closing price; similar to the same term used in stock trading. leveraged positions of traders as a security the term securities refers to a fungible and tradable financial instrument that carries a type of monetary value. measure, especially when there are very pronounced fluctuations in the price of digital currencies. This is done mainly to avoid partial or total losses of the initial margin managed by the user.
In this case, around 80% of the USD $300 million settled came from long a situation where you buy a cryptocurrency with the expectation of selling it at a higher price for profit later. positions, i.e. futures contracts in which users bet mainly on the associated asset increasing in price. Of this capital, some USD $119 million was settled via Binance, followed by some USD $78 million recorded in FTX.
As for other cryptocurrencies it goes like this:
- The futures of Ethereum a decentralized open-source blockchain with smart contracts functionality. capitalized more than USD $57 million in settlements.
- With futures of Solana y Terra, were quoted at USD $9.1 million each.
- With coins like Polygon, Sushi y XRP capitalized USD $8.2 million, USD $6.8 million and USD $6.7 million, respectively.
The fall in the price of the main digital currencies
As previously mentioned, the liquidation of these contracts occurred against the backdrop of the drop seen in the price of Bitcoin and a good part of the main altcoins for this December 28th, just three days before the official closing of the year 2021.
At the time of publishing the price of Bitcoin is at around USD $47.884 per unit, down 7.8% in the last 24 hours. With similar or higher percentage drops, we also have currencies like Etheruem, Binance Coin, Solana, Cardano, XRP, Terra, Polkadot and many others.
As for the broader market, the decline seen among the major digital currencies resulted in a 7.65% drop in global capitalization, which stands at over USD $2,225 billion at this hour.
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Version by Angel Di Matteo / DiarioBitcoin
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