Summary

• Short traders have incurred around $457 million in losses across major centralized exchanges
• The crypto exchange OKX has incurred the most losses, at over $241 million.
• The total value of liquidated positions over the past day was more than $727 million.

Traders who were betting against the crypto market have suffered heavy losses as major cryptocurrencies have surged higher in one of the most impressive rallies in the past year. According to data by CoinGlass, short traders have incurred around $457 million in losses across major centralized exchanges over the past 24 hours. The crypto exchange OKX took the lion's share of these losses at over $241 million, followed by Binance at $116 million.

But it's not just short traders who have been caught off guard, as over $108 million in long positions were also liquidated. This brings the total value of liquidated positions over the past day to more than $727 million, a level not seen since November 8th when the crypto exchange FTX faced trouble. The majority of these liquidations occurred in the past 12 hours, with the value of liquidated positions reaching $514 million.

Bitcoin-tracked futures experienced $23 million in both short and long liquidations over the past day, while Ethereum-linked futures saw over $16.8 million in liquidations. Solana, DogeCoin, and Aptos-tracked futures also saw around $3 million worth of liquidations.

The record level of liquidations comes as major cryptocurrencies broke above key resistance levels and extended their rallies. Bitcoin, the world's largest cryptocurrency, passed the $21,000 price mark at one point over the past day, while Ethereum reached around $1,600. Both coins have gained around 10% over the past day.

Meanwhile, there has also been a steep rise in activity in the futures market for digital currencies. As noted by Crypto Quant's Ki Young Jun, buyers entered the market early Saturday morning, purchasing around $4 billion worth of bitcoin futures.

While a mix of factors might have contributed to the recent crypto rally, the crypto market managed to gather momentum after new data released Thursday by the U.S. Department of Labor indicated a cooldown in inflation. The annual inflation rate fell to 6.5% in December, compared to 7.1% in November. Month-over-month, inflation cooled by 0.1%, compared to the 0.1% increase last month. Core CPI, which does not take volatile food and energy prices into account, fell to 5.7% from 6% in November.

Lower inflation is usually viewed as bullish for risk assets like crypto as it puts pressure on the US Federal Reserve to slow down interest rate increases. Over the past year, the Fed and other central banks worldwide have been raising interest rates aggressively, creating an unfavorable environment for crypto and other risk assets. However, with this new data, it seems the crypto market is on the rebound and traders who were betting against it are feeling the pain.