Ben Zhou, CEO of Bybit, said the recent crypto liquidation that affected over 720,700 traders in the last 24 hours is far worse than reported.
The crypto market experienced a crash in reaction to U.S President Donald Trump’s new tariff statement, and Bitcoin and Ether led the crash. Bitcoin dropped below $92k while ETH dropped to $2400 as it lost 17% of its value overnight.
However, Zhou, in a recent tweet, said the actual liquidation figure, which was estimated to be $2.24 billion, was way higher.
“I am afraid that today’s real total liquidation is a lot more than $2B”
Zhou estimates the actual number to be between $8 billion and $10 billion. He said that Bybit has API limitations that restrict how much liquidation is displayed, meaning that traders might not be seeing the full losses, and the market situation could even be worse than it appears.
Right now, Ethereum is trading for $2,713, after gaining back 7% for the day according to Coingecko.
Ethereum saw the largest loss, with $622 million in long and short-liquidated positions, according to Coinglass Long positions took a beating too, with $1.9 billion in liquidation, representing 84% of the overall figure. Ethereum longs represented $473 million of that figure.
Presto Research’s analyst Min Jung said that Ethereum’s sharp fall was much greater compared to Bitcoin and Solana. She added that Ethereum’s poor performance also has to do with some inner battles in its Ethereum Foundation, which included the leadership battles and its transition towards becoming more institutional. According to her, all of this created a negative sentiment towards the coin.
Meanwhile, this is ETH’s biggest intraday drop since May 2021, when it dropped from a high of $4,308 to $2,200 in seven days. At the time, Ethereum traded at almost 48% below its record high of $4,878 from November 2021.
Moreover, the volatility spike during the crash was massive. In Asia trading hours, Ethereum’s one-day at-the-money volatility rose from 34% to 184%, which means a lot of traders panicked.
The put-call ratio, an indicator that measures how traders perceive risk, increased from 0.6 to 2.5. Also, a dormant whale transferred $228.6 million worth of Ethereum to Bitfinex at the eleventh hour, putting additional pressure on sell-offs.
But what caused this crash? Well, the overall market was already on edge due to Trump’s new tariffs. These tariffs impacted Canada, Mexico, and China and increased concerns about inflation and decelerating the economy.
Many investors stayed away from high-risk investments like cryptocurrencies due to these concerns. Historically, such political tension often put pressure on the market.
Right now, the crypto market is very volatile. If the tension gets worse, it could lead to a bearish trend.
Also Read: Trump-Backed WLFI and Crypto Portfolio Drops Amid Market Crash
