369,100 investors lose everything as crypto market dips by over $200 billion
As bitcoin prices plunged below $43,000, $3.5 billion in liquidation took place, dropping the market value from $2.3 trillion to $2.1 trillion at the time of writing.
A total of 369,103 traders liquidated their accounts for the day. The biggest liquidation order happened on Huobi-BTC.
What is liquidation?
- Investors leveraged positions are liquidated if an exchange closes them for a partial or total loss of their initial margin when on cryptocurrency markets.
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- A trader who is incapable of meeting the margin requirements for a leveraged position (doesn’t have the funds to keep the position open) will be forced to liquidate the trade. Liquidation occurs both in margin and futures markets.
- In the case of a large move against a leveraged position, you can lose the entire collateral (initial margin) you paid. Some countries, such as the United Kingdom, consider crypto trading such a risk that they have prohibited crypto exchanges from offering leveraged products to retail investors in order to protect them from losses.
Bitcoin’s 16% plunge in the wake of its official recognition as legal tender in El Salvador had fueled bullish sentiment as the United States was coming off of Labor Day holiday weekend.
Source: nairametrics
Via: norvanreports
