Investors in the central cryptocurrency exchange suffered losses of over $1 billion due to forced liquidations during the recent downturn in the crypto market. The decentralized finance (DeFi) market also took a hit from the liquidations, with the risk of more forced liquidations looming if the decline in the price of the largest altcoin, Ethereum (ETH), continues.
Binance Follows OKX as Market Leader
According to cryptocurrency data platform CoinGlass, the forced liquidations caused by the recent sharp drop in the crypto market resulted in the loss of $1.04 billion for crypto investors. The drop in the price of Bitcoin (BTC) from $27,600 to $25,600 and its quick return to $26,500 primarily affected investors who had opened long positions. Out of the total liquidations of $1.04 billion, $836 million came from long positions and $205 million from short positions.
The largest liquidation occurred on OKX during this turbulent period. A total of $308 million worth of long positions were liquidated on the giant cryptocurrency exchange in the past 24 hours. According to CoinGlass data, Binance followed OKX with $189 million worth of liquidated positions.
DeFi Market Takes its Share of Liquidations
Data provided by Parsec, a provider of DeFi market data, shows that the recent sharp drop in the crypto market resulted in over $75 million in liquidations in the DeFi sector, with the price of the largest altcoin, Ethereum (ETH), falling below $1,600.
In addition, if the price of Ethereum falls below $1,500, the DeFi market will face a liquidation risk of approximately $270 million in collateral. This means that if the crypto market experiences a new wave of decline, it will shake the DeFi market with a new wave of liquidations.
The last major liquidation in the Ethereum lending market occurred in November 2022, with approximately $100 million in collateral liquidated.
