The past day has been marked by volatility in the crypto market as Bitcoin (BTC) and other digital assets witnessed a significant surge towards $31,000. With such price fluctuations, it is not surprising that chaos ensued in the futures market.

Crypto futures contracts incurred liquidations amounting to nearly $120 million over the past 24 hours. Of this total, approximately $86 million can be attributed to short contracts. The majority of this volatility was driven by the sudden surge in asset prices, causing shorts to bear the brunt of the impact. This phenomenon is commonly referred to as a “short squeeze,” whereby mass liquidations predominantly affect short positions.

A closer look at the table reveals that a significant portion of this short squeeze, approximately $65 million, occurred within the last twelve hours. This aligns perfectly with the period of heightened volatility.

Examining the breakdown of liquidations among different cryptocurrencies, Bitcoin futures contracts played a major role in this liquidation event. Ethereum followed closely as the second largest contributor. Additionally, altcoins such as Chainlink (LINK) and Solana (SOL) experienced high liquidations due to their impressive recent rallies. LINK recorded a 35% profit in the past week, while SOL surged by 28%. Consequently, traders were naturally enticed to open futures positions based on these assets.

Liquidation squeezes, like the one observed today, are not uncommon in the crypto sector. The inherent volatility of most digital assets often gives rise to days filled with significant price fluctuations.

Despite the liquidation events, traders remain undeterred, as indicated by the increase in Bitcoin open interest. Graphs show that the total amount of positions open on the Bitcoin futures market, known as “open interest,” is approaching the $10 billion mark.

As for the BTC price, although there was a slight pullback from earlier highs above $30,900, the asset is still trading around $30,600, signaling resilience in the face of recent market dynamics.

The crypto futures market experienced high liquidations in the past day as Bitcoin and other assets rallied. This volatile period resulted in a short squeeze, predominantly affecting short contracts. Notably, Bitcoin futures contributed the most to this liquidation event, closely followed by Ethereum, Chainlink, and Solana. Despite the fluctuations, traders remain engaged, with Bitcoin open interest continuing to rise. As the sector’s inherent volatility persists, it is crucial for traders to remain vigilant and adapt to changing market conditions.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.