Bitcoin experienced a major liquidation sweep on April 23, wiping out a total of $652.84 million across the crypto market and causing losses for 172,948 traders. Bitcoin alone accounted for $321.70 million, or roughly 50% of the total amount liquidated. Exchange dashboards revealed that shorts carried the majority of the losses, with more than 95% of BTC positions liquidated being shorts. Platforms like Bybit, HTX, Gate.io, and CoinEx saw a high percentage of shorts being liquidated, with Bybit leading the tally at $163.92 million in losses.
The wipe-out occurred following a sharp price rebound, with Bitcoin’s closing price on April 22 at $93,480 and rising to $93,710 on the following day, marking an almost 8% increase from the previous day’s open. This price increase led to a significant expansion in open interest, with aggregate BTC OI climbing from $58.46 billion to $67.28 billion in just 24 hours, a 15% jump indicating the influx of fresh leverage. An influx of $8.8 billion in new contracts, primarily on perpetual venues, set the stage for abrupt liquidations once the price surpassed $90,000.
The rally in Bitcoin was fueled by macro news events, including the IMF cutting its global growth outlook and warning of inflation, as well as positive progress on US-China trade talks. A note from Standard Chartered highlighting Bitcoin’s undervaluation in relation to emerging systemic risk also contributed to increased demand for crypto as a policy hedge. These events prompted a swift rotation out of bearish bets and into more bullish positions, leading to the cascade of liquidations in the market.
Traders were caught off guard due to their heavy exposure on short positions, as they had been anticipating softer prices amidst tariff volatility and higher real rates. The thin liquidity between $90,000 and $94,000 accelerated the climb through stop zones, triggering automated liquidations across various platforms. While Ethereum also experienced losses amounting to $130.31 million, Bitcoin’s dominance in speculative leverage indicated that the majority of positions were concentrated on BTC pairs.
The surge in open interest and positive funding rates highlighted a trend where traders were heavily favoring leveraged long positions over more balanced exposure. Funding rates on major platforms were positive, indicating that long positions were paying a premium to maintain their positions. This bullish tilt could lead to increased leverage if the spot price remains above $90,000, but high funding costs may prompt traders to cut their positions quickly if the price stalls, potentially causing a long-side shake-out in the market.
