Cryptocurrencies sink as US$1.5 billion in bullish bets wiped out

CRYPTOCURRENCY traders saw more than US$1.5 billion in bullish wagers liquidated on Monday (Sep 22), triggering a sharp sell-off that hit smaller tokens hardest.

Ether slumped as much as 9 per cent to US$4,075 as nearly half a billion dollars of leveraged long positions in the second-largest token were liquidated, according to data from Coinglass. Bitcoin declined almost 3 per cent to US$111,998.

Insatiable demand from publicly listed vehicles bent on hoarding tokens drove both Bitcoin and Ether to all-time highs in August, but there are now signs that the momentum generated by so-called digital-asset treasury companies is beginning to fade. Japan’s Metaplanet, a high-profile Bitcoin buyer, is down about 67 per cent from a mid-June peak. 

“It feels like the market needs a breather, with some participants concerned that the ‘DAT-trade’ is losing steam and there are no more meaningful inflows on the horizon,” said George Mandres, senior trader at XBTO Trading.

On Monday, more than 407,000 traders were liquidated over a 24-hour period, the Coinglass data show. The sell-off dragged the overall digital-asset market capitalisation beneath US$4 trillion.

Bitcoin was trading at US$112,804 and Ether at US$4,208 as at 9.12 am in London.