Bitcoin price recorded its new all-time-high above $62K only a couple of days back, having spent a majority of February and the first week of March in a consolidation phase. However, the price recorded a sharp correction of $5K this morning resulting in the liquidation of more than a billion-dollar worth of BTC derivative contracts within 30 minutes.
Binance exchange topped the list of highest liquidation during this phase with nearly $450 million worth of BTC derivatives contracts majorly comprising of long positions. The second highest liquidation came from Bybit which saw nearly $320 million in Bitcoin derivatives position getting liquidated, followed by Huobi, OKEx, and Bitmex. The primary reason for Binance to top the liquidation charts in most of these scenarios is mainly because of the significantly high leverage trade that the exchange offers compared against other platforms.
The significantly higher leverage position is one of the key reasons behind Binance’s huge success in the Futures market. At one point the daily trading volume for BTC Futures on Binance reached $2.7 billion.
A similar liquidation was seen across the exchanges when Bitcoin price finally broke to new ATH above $62K, liquidating billions in short positions.
Open Interest on Exchanges Record a Sharp Dip
The sharp price correction followed by major BTC liquidation across exchanges was so ruthless that the open interest for Bitcoin Futures also recorded sharp corrections on these exchanges. Binane again topped the chart with its Open Interest falling 10.69% followed by Bybit with 8.53% and then Huobi with 7.66%.
Many even attributed the recent price correction to the Indian cryptocurrency ban FUD which has been going on for quite some time now. The early reports suggested that the government is planning to launch its own digital currency and would put a blanket ban on the use of other cryptocurrencies including Bitcoin.
The Finance Minister in an interview claimed that they might not go for an outright ban and would consider checking the use case viability of the crypto assets, sending a sense of relief among Indian crypto enthusiasts. However, the very same day some ‘inside reports’ with apparent parliamentary “sources” claimed that the Indian government would indeed proceed with the blanket ban and would also take cognizance of crypto mining in the country.