In a recent statement, Ben Zhou, the CEO of Bybit, one of the leading global crypto exchanges, suggested that the total amount of crypto liquidations could have reached an alarming $10 billion, far exceeding initial estimates. According to data from CoinGlass, over $2.24 billion was liquidated from the crypto markets in 24 hours.
I am afraid that today real total liquidation is a lot more than $2B, by my estimation it should be at least around $8-10b. FYI, Bybit 24hr liquidation alone was $2.1B, As you can see in below screenshot, Bybit 24hr liquidations recorded on Coinglass was around $333m, however,… https://t.co/4WLkPxTYF4 pic.twitter.com/woTOHQvNkt
— Ben Zhou (@benbybit) February 3, 2025
Liquidation refers to the automatic closing of a trader’s position when the value of their holdings falls below a certain threshold. Traders who use leverage, borrowing capital to amplify their trading positions, are particularly vulnerable to liquidation when the market moves against them. The more leverage a trader uses, the smaller the price movement required to trigger a liquidation.
During intense market fluctuations, as seen recently, liquidations can quickly pile up, amplifying price swings and fueling a dangerous cycle of continuous sell-offs. These forced liquidations can put downward pressure on asset prices, potentially setting off more liquidations and further destabilizing the market.
The multibillion-dollar crypto liquidation event also unfolded alongside rising macroeconomic concerns about a potential global trade war, just hours after President Donald Trump signed an executive order imposing import tariffs on goods from China, Canada, and Mexico.
API Limitations Cause Crypto Liquidation Data Discrepancy
The discrepancies in the crypto liquidation figures were likely due to limitations in the crypto exchange’s application programming interfaces (APIs). As a result, platforms like CoinGlass reported Bybit’s liquidations at $333 million, rather than the actual $2.1 billion figure, Zhou said, adding:
“We have api limitation on how much feeds are pushed out per second. From my observation, other exchanges also practice the same to limit liquidation data.”
He added that from now on, Bybit will begin releasing all liquidation data and is committed to transparency.
As a result of the recent liquidation, investors have become terrified. The Crypto Fear and Greed Index displays fear, which signifies a high level of sell pressure after indicating greed a day before. This could also mean a buying opportunity.
Sampson Gideon | March 13, 2025
