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Crypto venues recorded over $33 million in liquidations tied to AI chip stocks, with leveraged long positions accounting for most losses.
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SOXL contracts led with $13.05 million liquidated, followed by SanDisk and Micron.
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<a href="https://xpertsstudio.com/bitcoin-network-fee-12-cents-per-withdrawal/” title=”Bitcoin network fee: 12 cents per withdrawal”>Bitcoin traded near its $80,862 long liquidation-risk level, while Ethereum hovered close to its comparable $2,354 threshold.
Bitcoin (BTC) traded just above a cluster of leveraged long bets on Sunday. Traders who piled into AI chip stocks lost about $33.8 million on crypto exchanges a day earlier. The wipeout hit contracts tied to Micron (MU), SanDisk (SNDK) and SK Hynix (SKHY) one day before the 39th anniversary of the Black Monday crash.
AI Chip Liquidations As Leveraged Longs Get Wiped Out
The losses were seen in perpetual futures, contracts that have no expiration date and follow the price of a stock. Traders kept placing bets even as Wall Street was closed, with exchanges such as Binance and OKX offering around-the-clock trading.
A liquidation event occurs when an exchange liquidates a leveraged position that has run out of margin. Most liquidations on Saturday were long positions, or bets on prices rising.
Contracts tied to the Direxion Daily Semiconductor Bull 3X Shares (SOXL) took the biggest hit, CoinGlass said. The fund seeks to deliver three times the daily performance of a chip-stock index. Its contracts saw $13.05 million worth of liquidations over a period of 24 hours. The largest single position liquidated was worth roughly $3.17 million.
SOXL’s contract was up more than 8.5% on the day while Micron and SK Hynix contracts each rose more than 7%. However, all three later rebounded from those lows
Longs Took Most Losses
SanDisk followed with liquidations worth approximately $11.98 million. Longs accounted for 95% of that. Micron contracts also dropped about $4.45 million, almost all of it from longs. SK Hynix’s contracts lost $3.77 million.
CoinGlass data also showed more than 4,000 traders had been liquidated on five chip-linked contracts. Each one reached its liquidation peak in the same hour on Saturday. Binance was responsible for more than 50% of the losses on each contract.
Bitcoin Sits Near Danger Zone
The chip losses were included in a broader wave of forced selling. Crypto markets have seen about $352.1 million in liquidations during the past 24 hours, a rise of 67% over the past day. The largest single liquidation was a $7.27 million short on Binance’s contract for the Direxion Daily Semiconductor Bear 3X Shares (SOXS).
Source: finance.yahoo.com