Crypto traders suffered more than $100 million in liquidations on Monday as digital asset prices dropped sharply amid escalating conflict in the Middle East.
According to data from CoinGlass, $105 million worth of long positions were wiped out as crypto prices tumbled due to the fighting between Israel and Hamas. This marked the highest daily liquidation volume since September 11th.
Crypto market trades in the red
Bitcoin fell over 2% before recovering, while Ether declined nearly 5%, and altcoins like Solana and Polygon’s MATIC token saw 6-7% slides. The broader risk-off sentiment sinking markets triggered cascading liquidations.
Ethereum derivatives traders were hit hardest, with $32.78 million in longs liquidated over 24 hours. The largest single liquidation was a $4.5 million ETH position on Binance.
Liquidations occur when exchanges force the closure of leveraged trades due to margin requirements being unmet as asset values decline.
While crypto recovered some losses, the flare-up of geopolitical instability shows digital assets remain susceptible to global tensions. The resulting liquidation carnage highlights the amplified risks of trading crypto derivatives during market turmoil.
With instability likely to persist, traders should exercise caution when leverage trading to avoid being caught off guard by swift sell-offs. The ability to meet margin requirements is crucial for avoiding liquidation in rough conditions.