Binance Bitcoin Futures Skyrockets to $48,000 in a Monster Wick
OI on Binance BTC futures is currently at 78.89k BTC, down from 101.37k BTC from last week, while being the only exchange to have a negative change in ETH futures’ OI in the past 24 hours but still sitting at the highest 627k ETH.
The textbook short squeeze that took place this weekend saw the price of bitcoin going as high as $48,000 on the leading cryptocurrency exchange.
On other crypto exchanges, this short squeeze sent the price of bitcoin to nearly $40,000 and Ether to almost $2,400, with Binance an anomaly.
On Binance itself, while Bitcoin wicked to about $39,800 on spot and on futures, it went as high as $48,168. In response, Binance has reportedly said that “API user place wrong orders, the liquidation price is the marked price, the extreme price will be automatically removed, and the user will not be affected.”
muh convexity, tho, Binance handled these liquidation horribly imo
bitmex handle liquidations via limit orders and i thats probably good model, smoother and gentler into the market. pic.twitter.com/kZ3eU37ZvZ
— CL (@CL207) July 26, 2021
In the past 24 hours, more than 100,000 traders were liquidated for about $1.14 billion, with nearly $950 million being the short positions.
Bybit accounted for a majority of these liquidations at about $440 million, followed by OKEx and Huobi for just under $220 million, according to Bybt.
Binance, meanwhile, is accounting for a mere 11.4% of these liquidations at $129.5 million. However, the leading crypto exchange has stopped showing accurate liquidation for some time now, and these figures are expected to be much higher. Previously, Binance used to lead the market in liquidations.
This can be seen in the second-biggest drop of over 12% in OI on Binance’s Bitcoin futures in the past 24 hours.
Currently, at 78.89k BTC, it is down from 101.37k BTC on June 20, which was an increase of 78% in nearly a month as new short positions were opened. Still, it is the highest OI, accounting for 22.7% of the total BTC futures open interest.
“Binance straight up under-reports liq data, but OI down by ~12k BTC following that move and net buying on that 1m candle was ~12k BTC. Good ol cascade,” commented trader Hsaka. “Around ~$600m of forced buying in under 60 seconds.”
The Binance USDT margined perpetual hit 48K during the short squeeze. Here's a replay of its price action for posterity. pic.twitter.com/t4iKzcVnVd
— Alex Krüger (@krugermacro) July 26, 2021
When it comes to Ether futures, only Binance has a negative change of 4.45% in the past 24 hours, now sitting at the highest 627k ETH while others had an increase in OI.
Amidst all this, Binance CEO Changpeng Zhao announced that they have started limiting new users to a maximum of 20x leverage a week ago on Monday.
“In the interest of Consumer Protection, we will apply this to existing users progressively over the next few weeks,” he added.
Meanwhile, several hedge funds have curbed their trading on Binance as the regulatory crackdown on it intensifies, the Financial Times reported.