Geopolitical conflicts exacerbate market collapse, traders suffer over $100 million in liquidation losses

Cryptocurrency traders lost more than $100 million in liquidations during Monday’s market rout as digital asset prices plunged amid an escalating war in the Middle East.

About $105 million in long positions — traders betting that prices will rise — had been liquidated as of U.S. afternoon, according to CoinGlass data. That was the largest single-day liquidation of long positions since Sept. 11.

Liquidation of digital assets in the past 24 hours. (CoinGlass)

The liquidations came as cryptocurrency prices tumbled as fighting between Israel and Hamas and growing unrest in the region weighed on investors, weighing on risk assets. Bitcoin (BTC), the largest digital asset, fell more than 2% before recovering to $27,600. Ethereum (ETH) fell nearly 5% at one point, while cryptocurrencies Solana (SOL), Polygon’s native token (MATIC) and Polkadot (DOT) fell between 6% and 7%. They later rebounded somewhat.

A liquidation occurs when an exchange closes a leveraged trading position due to a partial or full loss of the trader’s initial capital, or “margin,” because the trader fails to meet margin requirements or does not have sufficient funds to maintain the position.

According to CoinGlass, ETH derivatives traders bore the brunt of the fall as the price drop resulted in the liquidation of $32.78 million in long positions in the past 24 hours. The largest single liquidation order was a $4.5 million ETH-BUSD long on cryptocurrency exchange Binance.

Around $18.25 million worth of BTC long positions were liquidated, followed by Bitcoin Cash (BCH) and Bancor (BNT) tokens, both of which saw liquidations of over $3 million.