• Over $1 billion was wiped out in crypto liquidations as global markets suffered a crash
• Major cryptocurrencies like Bitcoin and Ether experienced sharp declines, with Bitcoin falling over 10% and Ether over 20%
• Around 300,000 crypto traders were liquidated from their leveraged positions or collateral trades amid the market downturn
The crypto market experienced a major crash on August 5, 2022, wiping out over $1 billion in leveraged positions. This crash was catalyzed by the weakening global economy and crashing stock markets.
Massive Liquidations Across Crypto Exchanges
As Bitcoin and Ethereum prices rapidly declined, traders were massively liquidated from their leveraged long and short positions. According to data from Coinglass, nearly 300,000 traders were liquidated for a total loss of $1.08 billion.
The largest single liquidation occurred on Huobi exchange, where one trader lost $27 million in a BTC/USD position. Most liquidations took place on major exchanges like Binance, OKX, Huobi, Bybit, and BitMEX.
Long positions lost over $930 million, while short positions lost $163 million. Around 80% of traders were liquidated in less than 12 hours amid the market crash.
Hackers Profit Off Market Crash
While most traders suffered losses, hackers managed to profit amid the bear market by buying up cheap Ethereum. After ETH crashed from $2,760 to $2,172, funds from the Nomad bridge hack in August were used to buy 16,892 Ether.
The purchased ETH was then laundered through the Tornado Cash mixer to cover the hacker’s tracks. This demonstrates how bears markets can produce opportunities for illicit activities.
Conclusion
The crypto crash of August 5th serves as another reminder of the market’s volatility. Leveraged positions can lead to massive liquidations for traders when prices move swiftly. As such, traders should be cautious with leverage and plan appropriately for downside risk.
