Crypto futures traders going long suffered heavy losses on Wednesday as prices fell, with $253 million in long liquidations. 

Bitcoin experienced a sharp sell-off yesterday, dropping below $30,000 as it fell 3.8% in about 5 hours, according to Binance data via TradingView. The broader crypto market fell in tandem with the leading cryptocurrency by market cap, with ether sinking below $2,000. Crypto stocks, such as Coinbase and MicroStrategy, were also in the red.

Long positions across derivatives exchanges saw the largest liquidations so far this year. About $253 million in longs were liquidated, according to data from The Block. Most of the volume was on Binance and OKX, which saw $95.4 million and $85.2 million in liquidations, respectively. 

Bitcoin was trading below $29,000 by 10:40 a.m. EDT, down a further 2.2% over the past 24 hours. Long liquidations continued as another $30 million has been wiped out in the past 12 hours. 

Prices plunge in shallow markets

The market dip was initially unexplained but has since been linked to a lack of liquidity and a large sell order on Binance. 

"In retrospect, fingers are now pointing to a large sell order emanating from Binance that pushed prices lower," said Noelle Acheson, the former head of research at Coindesk who now writes the Crypto is Macro Now newsletter on Substack. This then triggered liquidations which pushed prices even lower, she added. Acheson did note that volatility, which would typically spike in this instance, was unchanged — if not falling. 

Volumes on exchanges remain low, as does market liquidity, which Kaiko recently noted is at record lows. In low liquidity environments, price moves higher or lower can be exaggerated. Prices have less support to both the downside and the upside at the moment.