Bearish Bitcoin Traders Stung by $178 Million in Liquidations

• Nearly $180 million in liquidations due to a dramatic Bitcoin price surge.
• Short positions on Bitcoin futures made up 50% of the $400 million total crypto liquidations on Monday.
• Bitcoin prices surged by 12% to over $35,000, possibly driven by rumors of SEC approval for a spot Bitcoin ETF.

A dramatic bitcoin price surge has resulted in nearly $180 million worth of liquidations for traders betting against the cryptocurrency.

According to market data, short positions on bitcoin futures accounted for close to 50% of the $400 million in total crypto liquidations that took place on Monday. BTC prices spiked 12% to over $35,000, fueled by rumors of possible SEC approval for a spot bitcoin ETF.

Liquidations occur when an exchange force closes a trader’s leveraged position due to a partial or total loss of margins. This happens when traders lack adequate funds to keep highly leveraged trades open.

Major crypto exchanges saw $50 million liquidations each

Major exchanges like Binance, Huobi, and OKX saw liquidations of around $50 million each, indicating extensive use of leverage on those platforms. The largest single BTC liquidation order totaled $10 million on Binance.

The huge upside move in BTC caught many bearish traders off guard, leading to nearly $178 million in losses in a 24-hour period. Some analysts attributed the buying frenzy to relatively thin trading volumes and pent-up demand from bitcoin bulls.

Crypto communities are buzzing about the ticker registration for BlackRock’s potential spot bitcoin ETF, which is still under review by the SEC. Such an approval could open the crypto markets to fresh institutional inflows.

“Bitcoin has also been encouraged by possible ETF approval and an increasing number of ETF submissions by leading companies,” said Lucy Hu, senior trader at Metalpha.

While painful for overleveraged shorts, the liquidation flush may be seen as validation of a changing market structure for bitcoin—one with growing mainstream acceptance. For now, bearish traders will need to be cautious with their positioning or risk getting caught on the wrong side of large, volatility-fueled blows.