Of this amount, $787.18 million came from long positions, and only $149.88 million from shorts. Liquidation is the forced closing of a leveraged position when the collateral is no longer sufficient. $214.66 million was liquidated on a single Bitcoin, and 80.5% were longs. It was precisely those betting on growth who got wiped out.
The trigger for the sell-off was US statistics. The Producer Price Index (PPI — the prices at which businesses ship goods, an early inflation signal) rose in September by 1.3% month-over-month and 6.3% year-over-year. This is the strongest annual growth since December 2022.
A figure like this hits expectations of an imminent Fed rate cut, and expensive money first and foremost knocks out risk assets, that is, crypto.
Why the decline did not continue: Glassnode (an analytics company that reads blockchain data and exchange order books) recorded large buy orders at $80,000 that had been sitting in the book all last week. They were bought up, buyers immediately placed new ones, and the price went up. This same level coincided with the 50-day moving average.
It wasn't just crypto that was turning around: chipmaker stocks in Seoul rebounded from their worst close since April, and Asian markets were recovering in sync. While the bids at $80,000 are reloading, this zone remains the main point of demand.
Did you catch this bounce from $80,000?
Two hours to buy back from $80,000 — some managed to get in, some just watched the candle. After that, it's all down to arithmetic: the same percentage on a deposit of fifteen hundred and on an account of a hundred thousand is dinner versus a monthly goal. Prop trading works differently: the trading notional is provided by the company, and access to it is unlocked by passing a challenge, with profits split. This mechanic is easier to grasp in a calm market than on the night of another sell-off.