The market fell as a result of Binance’s settlement with the U.S. Securities and Exchange Commission (SEC) over several charges; futures traders who were betting on further growth were most affected.
Data from CoinGlass show, exchanges have liquidated crypto perpetual futures positions worth $227 million in the past 24 hours. Bullish longs accounted for nearly 80% of the tally. Meanwhile, over $67 million worth of bitcoin longs and shorts, referring to bets on and against price rises, respectively, have been liquidated in the past 24 hours. This was among the highest liquidation events in 2023.
Ether (ETH) futures traders lost $27 million, and Solana’s SOL traders suffered a $10 million loss. Comparatively speaking, BNB saw $6 million in liquidations. The token of the Binance-created BNB ecosystem is called BNB, and traders typically associate the token’s value with the success of the exchange.
The largest amount of liquidations among counterparties was assumed by traders at the cryptocurrency exchange Binance, with OKX taking home $62 million.
When a trader’s leveraged position is forcibly closed by an exchange as a result of losing all or a portion of their initial margin, this is known as liquidation. It occurs when a trader doesn’t have enough money to maintain an open position in a leveraged position, or can’t meet the margin requirements for the position.
Significant liquidations may indicate the local peak or bottom of a sharp price move, allowing traders to adjust their positions.
This kind of data is helpful to traders because it indicates that leverage is successfully being removed from popular futures products, which functions as a short-term indicator of a decrease in price volatility.
The largest cryptocurrency exchange in the world, Binance, agreed to pay $4.3 billion to settle criminal charges that it had broken money-transmitting and sanctions laws. This settlement represents “one of the largest penalties” that the U.S. had ever received from a corporate defendant.
Founder Changpeng “CZ” Zhao entered a guilty plea in Seattle to charges that he was personally involved in, and he also agreed to give up his position as CEO and pay a fine of $50 million. The CEO position will be assumed by Richard Teng, a former regulator in Abu Dhabi who subsequently led Binance’s regional markets.