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The market dropped ahead of a massive options expiry on Friday, with several large-caps falling 10%.
August 25, 2021 at 5:00 pm UTC · 2 min read
Top cryptos fell by over 5% today as the broader market saw a hit ahead of a $2 billion Bitcoin options expiry on Friday, data from multiple sources shows.
Leading the red charts were Ripple (XRP), Dogecoin (DOGE), and Solana (SOL), with each falling by over 10% and losing billions of dollars from their respective market caps in mere minutes.
As per data on CMB, the crypto market lost -4.8% off its $2.1 trillion market cap this morning. Bitcoin (-3%) and Ethereum (-4%) saw relatively lesser drawdowns compared to the likes of more popular alts, such as Cardano (-7%), Polkadot (-8%), and Solana (-13%).
Liquidations reach $589 million
‘Liquidations,’ for the uninitiated, occur when leveraged positions are automatically closed out by exchanges/brokerages as a “safety mechanism.” Futures and margin traders—who borrow capital from exchanges (usually in multiples) to place bigger bets—put up a small collateral amount before placing a trade.
Bitcoin traders took on a majority of all liquidations over the past day, with $200 million worth of trading positions getting obliterated. Ethereum traders were next with $113 million in liquidations, with Ripple (XRP), Cardano (ADA), and Dogecoin (DOGE) traders taking on $49 million, $28 million, and $24 million worth of damages.
86%—or $511 million of all liquidations—of all traders were those of a ‘long’ position, meaning betting on higher asset prices.