Crypto Sell-Off: Liquidations to Blame, Realized Losses Minimal

• CFTC sues Binance over Trading and Derivatives Rules.
• This caused a sell-off in the crypto market, with Bitcoin dropping to $26,600.
• Liquidations totaled to over $100 million in the past 4 hours for the entire crypto ecosystem.

CFTC Lawsuit Against Binance

The Commodity Futures Trading Commission (CFTC) has recently filed a lawsuit against cryptocurrency exchange Binance, alleging that it broke trading and derivatives rules. This has resulted in a sell-off of cryptocurrencies in the market, causing Bitcoin to drop down to $26,600. Consequently, liquidations totaled to over $100 million in the past four hours for the entire crypto ecosystem with around $65 million of realized losses during this period.

Liquidation Amounts

The lawsuit was enough to cause a significant amount of liquidation across digital assets, with losses spread out over multiple trading pairs such as BNBUSD which saw a price decline to 307 USDT, and its ratio compared to Bitcoin went down to a sixth-month low level of 0.011 BTC/BNB. In general, liquidations were plenty for the crypto market where more than $100 million were lost within four hours according to Coinglass.

Realized Losses

Out of these liquidations though only around $65 million were considered as realized losses due when comparing year-to-date data from Glassnode which is still very small amount when analyzing the wider context of previous dates such as Jan 26 and March 7 where hundreds of millions were lost in similar events – meaning that this is not yet seen as a capitulation event happening across various parts of the cryptocurrency market at this point in time.


Overall, while some losses on digital assets have been experienced by traders due to CFTC’s lawsuit against Binance, these amounts are still considered small when comparing it with previous events which happened earlier this year; hence why this is not yet seen as an industry wide capitulation event at this time.


It’s important for traders and investors alike to remember that while market dynamics can sometimes be uncertain or cause surprising drops or rallies on digital asset prices due sudden news; they should always take into account long term investment goals instead of focusing too much on short term swings caused by news driven events like today’s CFTC legal case against Binance as these could prove highly detrimental for one’s portfolio if done without proper assessment beforehand.