Jan 13th 2023

Traders betting against the crypto market have suffered more than $450 million in losses over the past 24 hours as major cryptocurrencies surged higher in one of the most impressive rallies in about a year.

According to data by CoinGlass, short traders suffered around $457 million across major centralized exchanges over the past day. Crypto exchange OKX took the lion’s share of these liquidations at over $241 million, followed by Binance at $116 million.

Aside from short traders, long traders have also been caught off guard as over $108 million in long positions were liquidated. This brings the total value of liquidated positions over the past day to more than $727 million, a level not seen since November 8 when trouble hit the crypto exchange FTX.

The bulk amount of liquidations came over the past 12 hours, data by CoinGlass show, with the value of liquidated positions reaching $514 million.

Bitcoin-tracked futures experienced $23 million in both short and long liquidations over the past day while Ethererum-linked futures saw over $16.8 million in liquidations. Solana, DogeCoin, and Aptos-tracked futures also saw around $3 million worth of liquidations.

The record level of liquidations come as major cryptocurrencies broke above key resistance levels and extended their rallies. Bitcoin, the world's largest cryptocurrency, passed the $21,000 price mark at one point over the past day while Ethereum reached around $1,600. Both coins have gained around 10% over the past day.

Meanwhile, there has also been a steep rise in activity in the futures market for digital currencies. As noted by Crypto Quant’s Ki Young Jun, buyers entered the market early Saturday morning, purchasing around $4 billion worth of bitcoin futures.

While a mix of factors might have impacted the recent crypto rally, the crypto market managed to gather momentum after new data released Thursday by the U.S. Department of Labor indicated a cooldown in inflation.

As expected, the annual inflation rate fell to 6.5% in December, compared to 7.1% in November. Month-over-month, inflation cooled by 0.1%, compared to the 0.1% increase last month. Core CPI, which does not take volatile food and energy prices into account, fell to 5.7% from 6% in November.

Lower inflation is usually viewed as bullish for risk assets like crypto as it puts pressure on the US Federal Reserve to slow down interest rate increases. Over the past year, the Fed and other central banks worldwide have been raising interest rates aggressively, creating an unfavorable environment for crypto and other risk assets.