Federal Reserve Rate Hike Spurs Liquidation of Over $330 Million Crypto Market

The FOMC meeting held on Wednesday and its ensuing outcome had a significant impact on the state of the cryptocurrency market. Clearing volumes rose sharply across the market, given the large price swings during and after the meeting. Tens of thousands of traders were caught in the crossfire in what turned out to be the biggest liquidation trend in the past few months.

Crypto Liquidations Reach $330 Million

On Wednesday, the Fed announced a further 0.75 percentage point hike in interest rates. The decision directly impacted not only the crypto market, but also the broader macro market, with Bitcoin’s price plummeting by around 8% before quickly recovering.

The drop has resulted in a massive liquidation across the market. By Thursday, total liquidations in the cryptocurrency market exceeded $330 million, affecting more than 88,000 traders. Given the drop, long traders were clearly hit the hardest, but as prices also rebounded sharply, short traders were also hit hard.

Liquidations cross $330 million | Source: Coinglass

Of the $336 million liquidations recorded on the final day, 58.96% were by long traders and $138.13 million were by short liquidations. The largest single liquidation he made was from the Okex exchange, with $3.13 million worth of trades across the BTC-USDT-SWAP pair.

Ethereum takes the lead

More recently, the focus has been on Ethereum after the digital asset successfully upgraded from proof of work to proof of stake. This growing attention has also amplified the performance of cryptocurrencies and their traders these days.

ETH liquidations accounted for almost half of the $336 million in liquidations recorded across crypto markets in a 24-hour period. 117.73K ETH was liquidated, worth $151.45 million during this time.

Market cap at $884 billion | Source: Crypto Total Market Cap on TradingView.com

In contrast, the leading cryptocurrency, Bitcoin, recorded a total liquidation of 55,000 BTC during this period, for a total of $105.31 million. This means that the ETH liquidation volume is about 50% higher than his BTC volume.

XRP was another token that saw a large liquidation, albeit to a lesser extent than Bitcoin and Ethereum. XRP’s trading volume reached $9.77 million, while SOL and ETC reached $6.73 million and 5.61 million percent respectively. All other cryptocurrencies had liquidations below $5 million.

Featured image from The World Economic Forum, chart from TradingView.com

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