$1 Billion Vanished: The Great Cryptocurrency Liquidation Catastrophe

In a dramatic turn of events, the cryptocurrency market witnessed a sharp decline, leading to over $1 billion in liquidations. As a result, $1 billion vanished from the market, with major cryptocurrencies, including Bitcoin and Ether, bearing the brunt of this downturn and causing significant losses for traders.

Market Turmoil: A Billion-Dollar Bloodbath

Crypto investors and traders faced a staggering $1.08 billion in total liquidations as the prices of prominent cryptocurrencies, such as Bitcoin, Ether, and Solana, plummeted. This market upheaval was exacerbated by a weakening global economy and, at the same time, a sudden crash in Japan’s stock market on August 5, which led to nearly 300,000 crypto traders being liquidated from their leveraged positions or collateral trades, according to data from Coinglass. Meanwhile, panic spread among investors, causing further market instability. Simultaneously, regulatory uncertainties added to the already volatile situation, pushing more traders into liquidation.

The ongoing bear market saw the prices of the most popular cryptocurrencies depreciate significantly. Bitcoin (BTC) and Ether (ETH) fell by over 10% and 20%, respectively, resulting in a massive loss of positions for traders who had anticipated a prolonged bull run.

Bitcoin and Ether: The Major Casualties

As Bitcoin prices crashed from around $65,000 to the $50,000 mark, traders holding long positions on crypto exchanges lost over $315 million in under 24 hours. Conversely, shorters lost $62.23 million during the same period. Meanwhile, Ethereum traders were not spared either. Specifically, long positions on Ethereum resulted in losses totaling $305 million, while short positions saw losses exceeding $50 million.

Similarly, other cryptocurrencies also experienced significant losses, reflecting the overall market turmoil. Consequently, traders faced substantial financial setbacks across the board.

Overall, long positions across all crypto assets lost over $930 million in 24 hours, while shorters lost $163.45 million. Nearly 80% of all traders were affected within less than 12 hours.

Huobi’s Record Liquidation

According to Coinglass data, the largest single liquidation order occurred on the crypto exchange Huobi, where a trader lost $27 million in the BTC/USD trading pair.

Most liquidations took place on Binance, the largest crypto exchange by trading volume. Other significant liquidations were recorded on OKX, Huobi, Bybit, and BitMEX, among other exchanges.

Opportunistic Hacks Amid Market Decline

While traders await a potential market recovery, hackers have found opportunities to profit amid the bear market. During this period, $1 billion vanished as Ether lost over 20% of its value, dropping from approximately $2,760 to $2,172. In the midst of this downturn, funds linked to a hack on the crypto bridge Nomad in August 2022 were used to buy 16,892 Ether.

Onchain activity revealed that hackers purchased ETH at low prices and siphoned it through the crypto mixer Tornado Cash to prevent traceability.

$1 Billion Vanished: The Great Cryptocurrency Liquidation Catastrophe

Market Turmoil: A Billion-Dollar Bloodbath

Bitcoin and Ether: The Major Casualties

Huobi’s Record Liquidation

Opportunistic Hacks Amid Market Decline

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