Cryptocurrency Market Correction Triggers $1 Billion Closure of Leveraged Futures Bets

cryptonews.com:

Bitcoin (BTC)‘s recent price correction, following its surge to a new all-time high above $69,000, has resulted in the closure of leveraged perpetual futures bets worth $1 billion across digital asset markets. 

On Tuesday, the leading cryptocurrency experienced a 10% drop, falling to $59,700, prompting a significant clearing of excess leverage from the market.

According to data by CoinGlass, long and short traders  suffered  more than $1 billion in losses across major centralized exchanges over the past 24 hours.

More specifically, 296,908 traders have been liquidated, with the total long liquidations coming in at $817 million and short liquidations coming in at around $234 million.

Crypto exchange Binance took the lion’s share of these liquidations at over $401 million, followed by OKX at $367 million and Bybit at around $104 million. 

Bitcoin-tracked futures experienced $309 million in both short and long liquidations over the past day while Ethererum-linked futures saw over $185 million in liquidations. 

The recent correction has had a normalizing effect on the funding rates in the crypto perpetual futures market. 

Annualized funding rates, which represent the cost of holding leveraged bets in perpetual futures tied to the top 25 cryptocurrencies, have now decreased to less than 20%. 

This is a substantial decline from the triple-digit figures observed just days ago.

The cooling of the overheated perpetual futures market paves the way for a more sustainable upward move towards new record highs. 

Funding rates had surged above 100% earlier in the week as Bitcoin’s strong bullish momentum attracted investors who sought to maximize their gains using leveraged products.

Exchanges employ the funding rate