Crypto Market Faces Sharp Correction with $700M Long Positions Liquidated; Binance Coin (BNB) Defies Trends

The cryptocurrency market experienced a sharp pullback after a series of impressive rallies, leading to widespread long liquidations totaling approximately $700 million. Notably, Bitcoin (BTC) and Ethereum (ETH) led the sell-off, while Binance Coin (BNB) defied the market downturn, posting significant gains and impacting short positions. This correction underscores the high volatility of the crypto market and emphasizes the risks associated with leveraged trading.

$621M Liquidated Within 24 Hours: A Dramatic Spike in Trading Activity

Data from Coinglass on November 8 (KST) revealed that $621 million (877.4 billion won) in trading positions were wiped out within just 24 hours—a staggering 86.10% increase in liquidation volume from the previous day. Long positions bore the brunt of this sell-off, comprising $470 million (669.3 billion won) or 75.8% of the total liquidations. On the other hand, $150 million (212.7 billion won) in short positions were liquidated during the same period, further reflecting the heightened market activity.

Ethereum Takes the Lead in Liquidation Volumes

Ethereum (ETH) recorded the highest liquidation volume among all digital assets. The cryptocurrency's price dropped 4.68%, resulting in total liquidations of $163 million (230.7 billion won). Of this, long positions accounted for $47 million (66.9 billion won), making up 74.7% of ETH’s liquidations. This highlights the prevalence of over-leveraged bullish bets during the recent rally, which unraveled sharply.

Bitcoin (BTC), the market leader, came in just behind Ethereum with $160 million (226.2 billion won) in total liquidations. BTC’s price fell by 2.37% to $12,197, leading to $120 million (170 billion won) in long-position liquidations—triple the $39 million (55.7 billion won) liquidated from short positions. The data underscores the overwhelming impact of long squeezes on these major cryptocurrencies.

Altcoins Face Heavy Liquidations with Solana (SOL) Hit Hard

Outside of Bitcoin and Ethereum, several altcoins were caught in the sell-off. Solana (SOL), in particular, experienced a notable price decline of 5.05%, triggering $37 million (53.1 billion won) in total liquidations. Once again, long position holders bore the brunt, with $27 million (38.4 billion won) liquidated, three times higher than the $10 million (14.7 billion won) in short liquidations. This reflects the widespread reliance on leveraged bets within the altcoin market.

Binance Coin (BNB) Thrives Amid the Market Downturn

Amidst a sea of red, Binance Coin (BNB) emerged as a market outlier, trending upwards by 7.19% during this turbulent period. BNB’s performance heavily impacted the market dynamics, resulting in $20 million (28.4 billion won) in short-position liquidations—more than double the $8 million (11.8 billion won) in long liquidations. This divergence in liquidation trends underscores BNB’s resilience and its ability to attract bullish activity even during broader market corrections, distinguishing it as a rare exception among major cryptocurrencies.

Market Volatility Surges: Record Liquidations and Falling Open Interest

Over 167,812 traders suffered liquidations during this highly volatile trading session. The largest single liquidation event involved a BTC-USDT perpetual swap contract on OKX, valuing $8.74 million (12.4 billion won).

This sharp increase in liquidations was fueled by excessive leverage in long positions during the recent rallies in BTC and ETH. As positions were unwound, the total trading volume soared by 30.1% to $402.2 billion (567.7 trillion won). At the same time, open interest (OI)—a measure of active derivatives contracts—dropped 3.42% to $225.1 billion (317.8 trillion won), a sign of traders de-risking amid growing market uncertainty.

Sentiment Indicators Reflect Investor Exhaustion

The recent market rally appears to have lost momentum as investor sentiment demonstrates signs of fatigue. The Fear and Greed Index fell to a neutral reading of 59, signaling uncertainty among market participants. Meanwhile, the Relative Strength Index (RSI) for major cryptocurrencies dropped to 49.75, leaving the overbought zone and providing further evidence of waning bullish sentiment.

Expert Insights on the Market Pullback

Analysts offer a critical perspective on the market correction. They point to a combination of profit-taking and leverage clearing as key drivers of the spike in liquidations. “The simultaneous occurrence of profit-taking and leverage clearing amplified the liquidation of long positions,” experts note.

Additionally, they suggest that the correction serves as a necessary "cooling-off" period, addressing short-term overheating in asset prices. Analysts predict that Bitcoin (BTC) could find support within the low $12,000 range following this period of heightened volatility.

Importance of Risk Management in Cryptocurrencies

This sharp liquidation event reinforces the inherent volatility of the digital asset market, where leverage amplifies both gains and risks. The episode serves as a reminder of the importance of prudent risk management and the potential dangers associated with speculative trading in cryptocurrencies. For traders, understanding the dynamics of leverage and managing exposure in such unpredictable markets are essential for long-term success.