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Today, the price of Bitcoin (BTC) plunged below $60,000, triggering a widespread drop in cryptocurrencies and triggering massive sell-offs in futures markets.

According to data from Coinglass explorer, $173.23 million was liquidated in the last 24 hours from 60,904 traders in leveraged positions in BTC and other cryptocurrencies.

Of this total, 82.24% of the liquidations, corresponding to US$ 151.70 million, were from long operations. In other words, traders who bet on rising prices. The remainder involved short positions, which bet on falling prices.

The largest liquidations occurred in BTC, with $44.15 million. Next comes Ether (ETH) with $40.59 million and Solana (SOL) with $8.40 million.

These liquidations result from the forced closure of traders’ leveraged positions in the futures market. In this type of operation, the trader uses money borrowed from the platform to increase their profit potential. However, when the price of BTC or any other asset moves in the opposite direction to the trader’s bet and the loss exceeds the initial margin they deposited, the exchange liquidates the position to recover the losses.

Bitcoin crash results in liquidations

There could be several reasons for the drop in Bitcoin’s price. One of them is the outflow of capital from BTC exchange-traded funds (ETFs) in the United States.

Recently, ETFs saw outflows of over $13 million, ending a five-day streak of positive capital inflow. This outflow is a negative indicator for the market. After all, it suggests a decrease in institutional investor interest in BTC.

Another factor that could be putting pressure on the price of BTC is the payment to creditors of Mt. Gox, the Japanese exchange that went bankrupt in 2014. In a recent statement, the company said that users will start receiving compensation from July.

“Payments will begin in the order of the exchange, so please wait a moment for the specific payment to be made,” detailed the Mt. Gox rehabilitation administrator. The expectation that a significant amount of BTC will “flood” the market has generated uncertainty and contributed to the price drop.

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