Bitcoin Sinks Below $60,000 As Crypto Market Liquidations Charge Over $300M

• Crypto assets saw more than $313 million worth of liquidations on Tuesday.
• Ethereum liquidations ranked highest after surpassing $100 million.
• Bitcoin open interest fell by $2.4 billion following the price correction.

The crypto market saw more than $313 million worth of liquidations on Tuesday after Bitcoin fell below $60,000, according to data from Coinglass. Long traders accounted for 90% of total liquidations worth $282 million, a magnitude above $31.36 million in short liquidations.

Bitcoin and Ethereum lead crypto liquidations

Ethereum led the liquidation chart with more than $100 million, of which $93.52 million were liquidated long positions. Ethereum is down almost 9% in the last 24 hours.

Crypto market liquidation

Bitcoin follows closely behind with over $94 million in liquidations, with long and short liquidations accounting for $85.97 million and $8.87 million, respectively. Notably, Bitcoin’s open interest (OI) has fallen by more than $2.4 billion in the past few hours.

Open interest is the total number of unsettled open long and short positions in the market. A decrease in open interest means increased liquidations or caution on the part of traders, often due to falling prices.

The correction follows an increase in the Bitcoin funding rate on August 25, which hit the highest level on the DyDx exchange since BTC’s all-time high in March, according to Santiment data.

Funding rates are periodic payments exchanged between buyers and sellers of crypto perpetual contracts based on the difference between the futures contract and its index price.

DyDx Bitcoin Funding Rates

More traders increasingly opened long positions in Bitcoin and Ethereum after Federal Reserve (Fed) Chairman Jerome Powell indicated a potential interest rate cut in September. However, the recent liquidation shows that the market has moved in the opposite direction.

“When funding rates get extreme in either direction, they are always prone to liquidating and pulling markets in the opposite direction,” Santiment analysts noted.

Solana was also hit hard, down more than 7% on the day. Over the past 24 hours, SOL has seen liquidations of over $11 million, with long and short liquidations accounting for $10.17 million and $1.01 million, respectively.