CoinDesk Analysis Team
CoinDesk
Bitcoin (BTC) and ether (ETH) surged 10% in the past 24 hours to retrace all weekend losses after crypto markets plunged following troubles at Silicon Valley Bank (SVB) on Friday night.
Bitcoin inched just over $22,500 in Asian morning hours on Monday while ether regained the $1,600 level, as per Coingecko. The move came as USD Coin (USDC)-issuer Circle said Sunday it would cover all shortfall in reserves, while Federal regulators said SVB depositors will have access to all funds on Monday morning after the U.S. open.
Traders betting on a market-wide decline were caught off guard as a broader market recovery in the past 24 hours saw $183 million in shorts, or bets against price rises, getting liquidated.
Shorts saw over $183 million in liquidations in the past 24 hours. (Coinglass)
Short traders made nearly 85% of all liquidations in the past 24 hours, Coinglass data shows.
Liquidation refers to when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. It happens when a trader is unable to meet the margin requirements for a leveraged position (fails to have sufficient funds to keep the trade open).
Large liquidations can signal the local top or bottom of a steep price move – which may allow traders to position themselves accordingly.
Liquidations on ether futures crossed $78 million, the most among all crypto futures, followed by bitcoin futures at $68 million. Such activity may have contributed to an overall market surge as shorts capitulated their positions.
Futures of other major tokens saw relatively lesser losses, suggesting movement was spot driven. Optimism (OP) and solana (SOL) took on $4 million in losses each, followed by litecoin (LTC) and aptos (APT) futures at $3 million.
Binance saw $75 million in short liquidations, the most among exchanges, followed by OKX at $47 million.
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