A sharp rise in crypto liquidations is sending a louder message of how some traders are using more leverage in recent months.

Average daily wipeouts have jumped from roughly $28 million in long bets and $15 million in shorts during the last cycle to about $68 million long and $45 million short in the current cycle, according to a new Glassnode and Fasanara report. That shift has made single sell-offs much more violent.

Early Black Friday Shock

Reports have disclosed that Oct. 10 was the clearest sign of the change. On that day, more than $640 million per hour in long positions were liquidated as Bitcoin plunged from $121,000 to $102,000.

Open interest fell about 22% in less than 12 hours, sliding from close to $50 billion to $39 billion. Traders felt the move fast. Positions were closed out on a scale Glassnode called one of the sharpest deleveraging events in Bitcoin’s history.

Futures Activity Hits Records

Futures markets have swelled. Open interest climbed to a record $68 billion and daily futures turnover topped $69 billion in mid-October.

Perpetual contracts now account for more than 90% of that activity, which concentrates risk in instruments that reset continuously.

Average daily futures wipeouts rising to $68 million long and $45 million short shows the costs when big swings occur.

Spot Trading Doubles

Based on reports, spot trading has also become more active. Bitcoin’s spot volume has climbed into an $8 billion to $22 billion daily range, roughly double what was seen in the prior cycle.

During the Oct. 10 crash, hourly spot volume spiked to $7.3 billion, with many traders stepping in to buy the dip rather than run for the exits. That flow has helped shift where price discovery happens.

Capital Flows And Market Share

Monthly inflows into Bitcoin have varied from $40 billion to $190 billion, pushing realized market capitalization to a record $1.1 trillion.

Roughly $730 billion has flowed into the network since the November 2022 low — more than all previous cycles combined.

As a result, Bitcoin’s share of overall crypto market cap rose from 38% in late 2022 to 58% today, based on the report’s figures.

Bitcoin As Settlement Rail

Meanwhile, there’s another striking stat: over the past 90 days the Bitcoin network processed nearly $7 trillion in transfers. That throughput exceeded what major card networks handled in the same window.

This has been cited as a reason some participants view Bitcoin not just as a store of value, but as an increasingly important settlement rail.

Bitcoin Price Action

At the time of writing, Bitcoin was trading at $93,165, up 6.5% and nearly 7% in the daily and weekly timeframes.

Featured image from Unsplash, chart from TradingView

Bitcoin has turned itself around with a sharp surge to $92,000, unleashing a fresh wave of short liquidations on the derivatives exchanges.

Bitcoin Has Seen A Flash Recovery Back To $92,000

Bitcoin suffered a blow on Monday as its price slipped under $84,000, but just as quickly as it had crashed, the cryptocurrency has made a swift recovery on Tuesday.

With the asset’s price now floating above $92,000, its price has surged by more than 8% over the last 24 hours.

Like is usually the case, Bitcoin hasn’t been alone in this rally; the rest of the cryptocurrency market has also shot up alongside the number one digital asset. Some of the top altcoins have even managed to outperform BTC, with Ethereum (ETH) sitting in a profit of nearly 10% for the past day.

The fresh wave of volatility in the sector has triggered a liquidation squeeze in the derivatives market.

Crypto Liquidations Have Crossed $400 Million In Last 24 Hours

According to data from CoinGlass, the cryptocurrency market as a whole has suffered over $410 million in liquidations during the past day. “Liquidation” here naturally refers to the forceful closure that any contract undergoes after it has amassed a certain percentage of loss (as defined by the platform).

Considering that the price action in this window was majorly to the upside, it’s not surprising to see that short contracts made up for most of the derivatives flush.

As is visible in the above table, $348 million in short positions found liquidation in the last 24 hours, equivalent to about 85% of the total flush.

In terms of the individual symbols, Bitcoin, Ethereum, and Solana were the top three contributors to the liquidation event with $196 million, $95 million, and $18 million in positions, respectively.

Just $13 million of the Bitcoin liquidations involved long investors; the rest $182 million in liquidations struck the traders betting on a bearish outcome for the cryptocurrency.

A mass liquidation event like this latest one is popularly known as a squeeze. Today’s squeeze involved shorts in an extreme majority, so the event will be termed a short squeeze.

During a squeeze, a sharp swing in the price triggers a large derivatives flush, which only ends up feeding back into the price move. The amplified price swing then unleashes a further cascade of liquidations.

Such events aren’t a particularly rare sight in the cryptocurrency market, as assets tend to be volatile and many traders opt for significant amounts of leverage.

The crypto market has started December in the red, shedding over $200 billion in total market value to settle at $3 trillion, its lowest level over the past week. Bitcoin (BTC), the world’s largest crypto asset, dropped below key support…