Crypto Crash: Crypto-currency market liquidations hit $300 million in the last 12 hours

The series of liquidations in the crypto-currency market caused by the sell-off related to the situation around the FTX exchange reflected in a surge in liquidation volume to $300 million. The most interesting part is the source of most of the liquidations.

Traditionally, every drop in the market and every increase in liquidations is caused by the price performance of the market’s largest asset, bitcoin. Today, however, this is not the case. According to Liquidation Datathe largest pain providers on the market today are FTT and ETH.

Why Ethereum and FTT are causing a crash

Following FTX’s potential insolvency issues, they have had no choice but to deploy as much capital as possible, which means selling their Ethereum holdings. The surge in selling pressure was confirmed by Santiment’s data, which confirmed the draining of ETH portfolios owned by FTX.

In just a few days, FTX lost nearly 300,000 ETH from its portfolios, causing such a massive increase in selling pressure on the Ethereum markets that investors had no chance of absorbing the aforementioned amount without it hurting the ETH market price.

Given the previous performance of the Ethereum price, the most likely reason behind such an unexpected spike in liquidations is related to the increase in the number of long positions in the market. Previously, traders were actively opening long positions despite the open interest leaning towards bears.

On the other hand, the liquidations on FTT did not occur because of FTX’s actions in the market. The most likely reason behind them is significant retail pressure caused by a panic around the exchange that uses the asset as a utility token.