The biggest short liquidations in the crypto market in the last 15 months

Nearly $500 million was liquidated on the FTX cryptocurrency exchange, which is more than usual.

More than $700 million has been liquidated in the cryptocurrency markets in short trades or betting against price increases, reaching levels not seen since July 2021.

The liquidations may have contributed to the short squeeze as the prices of several tokens have surged in the past 24 hours. Long-term loans, or traders betting on higher prices, liquidated an additional $100 million amid short-term price volatility.

Ether (ETH) jumped 10%, leading the rise among major cryptocurrencies, Cardano's ADA, Solana's SOL, and Dogecoin (DOGE) added about 9%, while Bitcoin (BTC) gained 4.3%. The total market capitalization of the cryptocoin increased by 4%, returning to the $1 trillion mark, the level previously observed in August.

Liquidations occur when an exchange forcibly closes a leveraged trader's position due to a partial or total loss of the trader's initial margin. This occurs when a trader is unable to meet the margin requirements for a leveraged position (does not have sufficient funds to keep the trade open).

Cryptocurrency exchange FTX recorded over $519M in short liquidations, the most among its peers, followed by OKX at $71M and Binance at $46M. Some Crypto Twitter users commented that the move was rather unusual.

About $368 million worth of Bitcoin futures were liquidated, both long and short, followed by $356 million worth of Ethereum futures. Among other major instruments, ADA futures caused traders $16 million in losses.

At the same time, open interest, or the number of unsettled derivative contracts outstanding, rose by 6.6%, which means traders are taking more positions in anticipation of further price increases.

These steps took place against the backdrop of growth in equity markets in general. The Nasdaq tech index ended Wednesday up 2.25%, while the S&P 500 gained 1.63%. Asian markets rose on Thursday, with Japan's Nikkei 225 gaining 0.90% and Hong Kong's Hang Seng gaining 0.63% since opening.