The cryptocurrency market looks calm over the past 24 hours, but that appearance is misleading. Sharp price swings around the Federal Reserve’s interest rate decision wiped out a large volume of leveraged futures positions.
According to CoinGlass data, $286 million worth of positions belonging to 87,294 traders were liquidated. The damage spread across Bitcoin, Ether and stock perpetual futures traded on cryptocurrency exchanges.
Crypto investors feel the impact of the Fed decision
Major cryptocurrencies were almost unchanged over the past 24 hours. However, prices moved sharply in both directions around the Fed meeting, clearing out leveraged positions before returning close to their starting levels.
CoinGlass data showed that $186 million of the liquidations came from long positions, while shorts accounted for $100 million. In other words, the market hit traders on both sides before ending the period with little overall change.
The damage in Bitcoin was almost evenly split. Of the $57 million in Bitcoin liquidations, $28 million came from longs and $29 million from shorts.
Bitcoin traded between $63,247 and $64,660, a range of little more than 2%. The move looked modest, but it was enough to liquidate traders positioned in both directions. The largest single liquidation was a $2.9 million Bitcoin position on Binance.
Ether liquidations reached $58 million, with long positions accounting for most of the losses. The price remained between $1,850 and $1,920.
Bitcoin is currently trading near $63,900, while Ethereum stands at around $1,900. Both assets are almost exactly where they were 24 hours earlier.
Fed decision triggers $188 million in liquidations
Most of the damage occurred around Wednesday’s Federal Reserve interest rate decision. The announcement alone triggered $188 million in liquidations, including $130 million in long positions.
The more striking activity appeared in stock perpetual futures traded on cryptocurrency exchanges. SanDisk contracts recorded $19 million in liquidations, followed by Micron with $10 million, SK Hynix with $7 million and the leveraged semiconductor fund SOXL with another $7 million.
These instruments are perpetual contracts that bring stock-market exposure onto cryptocurrency exchanges. They operate with the same leverage mechanism used for Bitcoin and other digital assets.
Almost all the liquidations occurred on the long side. In Micron contracts, the ratio was seven to one, with $9 million in long liquidations compared with $1 million in shorts. SanDisk’s ratio was approximately two to one.
Traders were using cryptocurrency infrastructure to bet on further gains in the artificial intelligence memory-chip theme. Those positions collided with one of the sharpest semiconductor sell-offs of the year.
Chip rally turns against leveraged traders
The timing proved costly. SK Hynix shares fell 17% on Wednesday after the company missed market expectations, despite reporting a 557% increase in profit. The Kospi has now fallen more than 40% from its June peak.
This marked the second incident this week in which stock perpetual contracts traded on cryptocurrency exchanges caused substantial losses.
On Monday, a single transaction on a low-volume Korean pre-market platform pushed Trade.xyz’s SK Hynix contract down 19%, triggering $60 million in liquidations. The exchange later agreed to cover all losses linked to the incident.
