Bitcoin Strengthens 13%, Short Position Traders Lose

Bitcoin has strengthened in recent days. (Photo; Doc. Pexels)

JAKARTA - On October 24 2023, Bitcoin (BTC) recorded a sharp spike of 13% during the morning trading session. This increase pushed the value of Bitcoin to 35,108 US dollars (IDR 556,668,108) per unit, triggering an increase in the overall cryptocurrency market of more than 10%.

However, traders who placed short positions against crypto assets such as Bitcoin and Ethereum found themselves in a difficult situation. Within 24 hours, crypto short positions worth  233 million US dollars (IDR 3,696,245 million) had evaporated.

As additional information, in trading, long and short positions refer to two opposite approaches. A long position is when a trader buys an asset in the hope that the price will rise, so that they can sell it at a higher price in the future to make a profit.

Meanwhile, a short position is when a trader borrows an asset they do not own, sells it on the market in the hope that the price will fall, and then buys it back at a lower price to return it to the party who lent the asset, making a profit from the price difference.

The market value of cryptocurrencies is currently around  1.3 trillion US dollars  (IDR 20.6 quadrillion), registering an increase of 10%. In the past day, the price of Bitcoin rose 13%, while other major cryptocurrencies also recorded significant gains: Ethereum (ETH) rose 9%, Binance Coin (BNB) rose 5%, and XRP and Solana recorded gains of 7%.

This rapid price increase caused traders shorting the top cryptocurrency to face liquidation. Their position disappeared after this impressive rally. Data from Coinglass shows that in the last 12 hours, the market witnessed liquidations of  51.91 million US dollars  (IDR 824 billion) in long positions and  103 million US dollars (IDR 1.6 trillion) in short positions.

Statistics for the last 24 hours show that short positions worth  323 million US dollars (IDR 5.1 trillion) have been liquidated, and long positions worth  104 million US dollars (IDR 1.6 trillion) have suffered the same fate. Bitcoin contracts accounted for the majority of the total short positions liquidated, reaching  232 million US dollars (IDR 3.6 trillion) of the total of  323 million US dollars (IDR 5.1 trillion).

Meanwhile, Ethereum (ETH) experienced the liquidation of short positions of more than  64 million US dollars (around IDR 1 trillion), while Solana (SOL) short positions reached around  11.4 million US dollars (IDR 180 billion). In addition, short positions on various other alternative crypto tokens reached around  21.83 million US dollars (IDR 346 billion).

Data from Coinglass also recorded a surge in trading volume, reaching 203 billion US dollars  (IDR 3.2 quadrillion) in the last 24 hours, an increase of 143% from the previous day. Open interest currently stands at almost  29.73 billion US dollars (IDR 471 trillion), up 4.55%. Overall, the last day saw crypto liquidations of a staggering 429.46 million US dollars (IDR 6.8 billion), both on long and short positions.