Bullish market movements catalyzed by Fed interest rate hikes have resulted in the liquidation of hundreds of millions of dollars worth short positions, with the unexpected reversal catching out bearish traders.
Data published via blockchain and cryptocurrency analytics platform Coinglass reveals Ethereum leading liquidations amidst positive cryptocurrency market movement, with over $160 million in Ethereum liquidated during an 11 percent price increase over 24 hours.
Ethereum, with a market capitalization of $197 billion, followed Bitcoin price increases of 7.3 percent in 24 hours from July 27, trading at $22,880. While recent Bitcoin gains indicate positive market sentiment, the leading digital asset is currently 66 percent down from a November 2021 all-time high of $68,789.
Short Traders Liquidates as Crypto Trading Volume Accelerates
Coinglass data indicates over 88,000 traders were liquidated subsequent to the market shift, resulting in losses exceeding $270 million across the entire cryptocurrency market. Bitcoin liquidations amounted to $116 million, $82 million of which consisted of open short positions.
Recent cryptocurrency market rallies follow announcements of 75 basis point interest rate hikes by the US Federal Reserve and rapidly accelerating trading volumes, with the cumulative trading volume of cryptocurrencies rising 30 percent from $72 billion to $92 billion on July 27.
Positive cryptocurrency market movements reflect positive action within traditional stock markets, with US stock indices such as the Dow Jones Industrial Average (DJI) closing 1.37 percent higher and the Nasdaq Composite IXIC gaining 4.06% percent.
Mainstream Cryptos and Altcoins Recover as Recession Looms
With the US GDP falling 1.6 percent in Q1 2022 and central banks adopting aggressive stances on rate hikes, sentiment across both stock and cryptocurrency markets has contributed to ongoing bear movement and significant losses across major digital assets such as Bitcoin and Ethereum alongside altcoins that include Shiba Inu and Dogecoin.
Gains captured by Ethereum and Bitcoin during the market reversal were reflected by altcoin price increases that include 5.8 percent 24-hour gains for Ripple (XRP), 5.7 percent gains for Shiba Inu (SHIB), and a 5.6 percent price increase for BNB.