The cryptocurrency market experienced significant volatility in the period surrounding the Federal Reserve's interest rate decision. While the 24-hour price movements of Bitcoin and Ethereum were relatively small, highly leveraged positions were liquidated, indicating that beneath the surface market calm, derivatives risks have not diminished.
Nearly $286 million was cleared in 24 hours.
CoinGlass data shows that approximately 87,294 traders had their positions liquidated in the past 24 hours, involving positions worth about $286 million. Of these, long positions lost approximately $186 million, and short positions lost approximately $100 million, indicating that the market experienced rapid two-way fluctuations during the Federal Reserve decision window before returning to its original position.
Bitcoin traded roughly flat at around $63,900 during this period, though it fluctuated between $63,247 and $64,660 at one point. This less than 2% range still resulted in the liquidation of approximately $57 million in Bitcoin positions, with losses for both long and short positions roughly evenly split.
Regarding Ethereum, the price fell back from around $1,920 to around $1,850, with a total liquidation amount of approximately $58 million, larger than Bitcoin's, and the losses were more concentrated on the long positions.
Volatility increased before and after the Fed decision
The report noted that the main liquidations occurred within 12 hours before and after the Federal Reserve's interest rate decision. During this period alone, approximately $188 million in liquidations took place, with long positions incurring losses of about $130 million.
This means that even if the spot price does not ultimately deviate significantly from its original level, short-term fluctuations during the decision-making period are still enough to trigger the liquidation of a large number of leveraged positions. The largest single liquidation came from a previous Bitcoin position on Binance, amounting to approximately $2.9 million.
Crypto platform stock perpetual contracts were also impacted.
Besides mainstream crypto assets, some stocks and ETF perpetual contracts listed on crypto trading platforms also suffered significant losses, mostly concentrated in long positions. The relevant trading targets primarily revolved around the AI chip and storage sectors.
- SanDisk-related positions were liquidated for approximately $19 million.
- Micron-related positions were liquidated for approximately $10 million.
- SK Hynix-related positions were liquidated for approximately $7 million.
In addition, approximately $7 million in positions in the leveraged semiconductor ETF SOXL were also liquidated. The report points out that these products were traded on cryptocurrency exchanges in a manner similar to Bitcoin perpetual contracts, with investors also using high leverage to bet on rising chip stocks.
SK Hynix shares fell 17% on Wednesday, becoming one of the focal points of this sell-off. Earlier on Monday, a pre-market trade in South Korea caused SK Hynix contracts on Trade.xyz to briefly drop 19%, triggering approximately $60 million in liquidations, for which the exchange subsequently agreed to compensate for the losses.
