Bitcoin price crashes to $16,350 as derivatives positions worth billions of dollars get liquidated

The price of bitcoin has fallen suddenly in the last 24 hours.

From about $19,500 yesterday, bitcoin crashed to $16,350 earlier today, a slide of about 15%.

The world's first and largest cryptocurrency is currently trading at about $16,800 on Coinbase, according to tracker TradingView

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Bitcoin price crashes are generally a result of force liquidations at crypto derivatives exchanges. Indeed, nearly $1.9 billion worth of open interest was liquidated from exchanges in the last 24 hours, according to The Block Research.

It means exchanges liquidated traders' overleveraged positions. Traders overleverage, or trade on margin, thinking that bitcoin's price would go up and they would benefit more. But when the price of bitcoin goes below the liquidation price of their positions, exchanges force liquidate or close those positions. Force liquidations take place when traders are unable to fulfill their margin requirements for a leveraged position.

Binance experienced the highest liquidations, worth about $840 million, followed by Huobi and OKEx.

Source: Bybt, The Block Research 

About Author

Yogita Khatri is a senior reporter at The Block, covering all things crypto. As one of the earliest team members, Yogita has played a pivotal role in breaking numerous stories, exclusives and scoops. With nearly 3,000 articles under her belt, Yogita holds the records as The Block's most-published and most-read author of all time. Prior to joining The Block, Yogita worked at crypto publication CoinDesk and The Economic Times, where she wrote on personal finance. To contact her, email: [email protected]. For her latest work, follow her on X @Yogita_Khatri5.