Crypto Market Sell-Off Sees Altcoins Face Estimated $8 Billion to $10 Billion in Liquidations

Bitcoin demonstrated resilience during the recent market sell-off, while altcoins experienced significant losses, with estimated liquidations ranging from $8 billion to $10 billion. A sharp spike in volatility led to a substantial decrease in open interest, with major platforms such as Bybit and Block Scholes reporting that Bitcoin remained relatively stable, while altcoins took the biggest hit.

Market Volatility and Liquidations

According to a research report, Bitcoin “outperformed relative to the wider crypto market,” with its perpetual swaps faring better than those of other cryptocurrencies. In contrast, the Ethereum options market experienced a sharp spike in short-term volatility, reaching levels above 140%, its highest in over three months.

The liquidations were severe, with over $3.1 billion in open interest vanishing across BTC, ETH, XRP, and Solana’s perpetual swaps. The true notional value of liquidated positions is estimated to be “at least $8 billion to $10 billion,” according to Bybit CEO Ben Zhou.

Funding Rates and Open Interest

Funding rates reflected the bearish shift in the market, with altcoins experiencing deeper negative funding rates in the days following the crash. Bitcoin, however, remained relatively stable. Open interest levels plummeted across major tokens, with one key exception – Bitcoin’s options market.

Unlike perpetuals, Bitcoin options did not experience a major liquidation event, and its term structure inversion quickly resolved. This suggests that Bitcoin’s options market may be more resilient to market volatility than other cryptocurrencies.

Trading Volume and Market Stability

Despite the market turmoil, trading volume surged, with over $31.1 billion in perpetual swaps traded on February 2, marking the highest daily volume in over a month. For Bitcoin, short-term options volatility eased after an early-week spike, suggesting a return to stability, at least for now.

Key takeaways from the market sell-off:

  • Bitcoin remained relatively stable during the market sell-off, while altcoins experienced significant losses.
  • Estimated liquidations ranged from $8 billion to $10 billion.
  • Funding rates turned negative for altcoins, while Bitcoin remained relatively stable.
  • Open interest levels plummeted across major tokens, except for Bitcoin’s options market.
  • Trading volume surged, with over $31.1 billion in perpetual swaps traded on February 2.

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