Bitcoin's slide below $80,000 set off forced liquidations of more than $815 million in leveraged crypto positions over 24 hours. Long positions took most of the losses, and open interest fell, suggesting traders cut exposure. The Federal Reserve's two-day policy meeting adds another potential source of volatility.
Bitcoin's move below $80,000 triggered hundreds of millions of dollars in forced liquidations, another reminder of the risks of leverage. Derivatives activity remains elevated, and traders are positioning around the Fed.
Bitcoin briefly fell to around $79,280 during the October 24 sell-off.
Longs take the hit in $815 million wipeout
Total liquidations across the previous 24 hours reached approximately $815 million, affecting more than 200,000 traders. Between 8 a.m. and noon ET alone, nearly $402 million in long positions were liquidated.
Bitcoin accounted for around $158 million of four-hour liquidations, while Ethereum contributed roughly $137 million. Longs represented more than 94% of BTC liquidations and more than 92% of ETH liquidations.
When Bitcoin moves sharply lower, exchanges automatically close leveraged long positions once available margin no longer covers losses. Those forced sales can push prices down further and trigger additional liquidations, which creates a liquidation cascade.
Open interest falls as traders cut exposure
Crypto futures open interest fell approximately 2.2% to $140.1 billion during the liquidation event. According to Crypto Daily, the decline suggests traders were closing positions rather than aggressively opening new leveraged bets.
A similar pattern appeared last week. CoinDesk reported that derivatives trading volume jumped 19% to $226.6 billion while open interest fell 2.46%.
Meanwhile, CoinDesk Research found that centralized exchange derivatives volume reached $3.94 trillion in September, up 15.7% month over month. Derivatives still represented 77.6% of combined centralized exchange volume, down from 79.3% in August.
The Fed meeting adds a catalyst
Bitcoin remained below $80,000 on October 27 as the Federal Reserve began its two-day policy meeting. Markets are closely watching the Fed's guidance on inflation and interest rates.
For leveraged traders, macro events such as Fed decisions can be particularly dangerous because they can generate rapid moves across Bitcoin, Ethereum and altcoins. Bitcoin moved only a few percent, yet high leverage and concentrated long positioning were enough to erase more than $800 million in positions.
Source: Crypto Daily
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