It’s been a tough week for traders on the high-leverage exchange, as crypto prices tumble.
According to statistics compiled by the site Datamish, crypto exchange BitMEX has liquidated cryptocurrency contracts in excess of $1.3bn in the last week alone.
The vast majority of those, about $1.275bn-worth, have been traders taking Long positions on BitMEX’s futures-style ‘swap’ contracts, which can be bought using leverage of up to 100x. Thus, these positions – essentially bets on the movement in price of an asset over time, with Longs reckoning prices will rise and Shorts reckoning they will fall – are bought with borrowed money, and recorded by the site as a lot higher in value than the investor funds backing them. Liquidations, however, mean that the losses a trade has accrued due to market movements have reached the limit of the assets backing that trader (their so-called Maintenance Margin). So basically, every liquidation is someone losing everything they’d put in their account on the site.
Yesterday alone, which saw Bitcoin fall below $5,000 for the first time since October 2017, led to something like $251.7m of Longs biting the dust. Today’s figure, however, is already at $70m and could exceed that if falls continue – or Bitcoin gets a bounce back and those in a short position (now the majority of traders on the site, by a margin of 55% to 45%) get a shock.
The vast majority of the damage, however, was done last Wednesday (November 14th), when Bitcoin broke below the consistent support it has received at around $6,000 for much of 2018. That was a move that wiped out almost $800m of long positions in a single 24hr period – and kept the @bitmexRekt twitter account, which records these things to social media for all to see, very, very busy. Already today, it has Tweeted well 150 times – including some big car crashes.
Liquidated long on XBTUSD: Sell 2,582,345 @ 4593.5 💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯💯🔥⚡ ~ Triple kill
— REKT (@BitmexRekt) November 20, 2018