The price of the Lisk (LSK) token in the cryptocurrency market reached over $2, marking an increase of more than 900% from its low in August. Just on Sunday, the token soared by over 500% before giving back much of its gains within a few hours and dropping to $0.80. This spike became the largest liquidation event in the past 24 hours in the crypto market, forcing traders on both the bullish and bearish sides to exit their positions.
In a single day, $41.13 million in liquidations of the LSK token were recorded. Of this, $33.68 million were short position liquidations, which is four times greater than the $7.44 million in long position liquidations. This ratio indicates a forced buyback of the token by short sellers who sought to cover their losses as the price rose. The open interest for LSK reached approximately $42 million with a daily futures turnover of $501 million. The current price of LSK holds at $0.81, representing a rise of over 300% in a day.
The situation surrounding Lisk began to unfold on August 25, when the project team announced plans to shut down its blockchain network on October 31 and transform into a stablecoin payment service for corporate finance departments. As part of this plan, it is proposed to destroy 100 million LSK held in the treasury, which would reduce the maximum token supply by a quarter. This move requires approval from token holders, and the voting has yet to take place. BeInCrypto noted these conditions back in July when Binance added LSK to its Monitoring Tag – a warning label for assets at risk of delisting due to unstable trading. Meanwhile, users holding funds on the Lisk blockchain must transfer their assets to Ethereum before the shutdown date.
Related articles
