In the latter half of March, crypto liquidations saw a significant drop of approximately 76%, as Bitcoin’s price stabilized around the $87,000 level after experiencing heightened volatility earlier in the month.
Data reveals that from March 12 to March 25, long liquidations amounted to $1.26 billion, while short liquidations totaled $1.14 billion.
This stands in contrast to the period from February 24 to March 12, where long liquidations reached $7.2 billion and short liquidations hit $2.8 billion. The decline in forced position closures corresponds with a decrease in intraday price fluctuations across major exchanges during this later timeframe.
Bitcoin’s price began at $82,857 on March 12 and rose to $87,330 by March 25, showing a narrower trading range compared to the preceding fortnight.
The transition from February to early March was marked by sharp price movements, with Bitcoin dipping below $79,000 on March 10 before recovering, aligning with a peak in long-positions being liquidated.
As open interest remained high in futures markets, the decrease in liquidations suggests a more measured approach to market participation and a lower risk of leverage among traders.
Although liquidation directionality was more even and even began to see a slight increase towards the end of March, positioning across derivatives platforms remained active.
A reduction in leverage tends to stabilize volatility, as price moves become less extreme without the amplification effects of leverage.