Bitcoin’s price plummeted to $26,298 on Aug. 17, marking a significant 9% decline within a 24-hour span.

Ethereum wasn’t spared either, as its price tumbled to $1,620, reflecting a 10% drop during the same period.

This abrupt downturn didn’t just rattle traders but also triggered extensive liquidation events for both Bitcoin (BTC) and Ethereum (ETH).

The derivatives market witnessed liquidations surpassing $1 billion. But it’s essential to differentiate between futures liquidations and realized loss. Futures liquidations refer to the process where the exchange automatically closes a trader’s position once their account balance falls below the maintenance margin. In contrast, realized loss pertains to the actual loss an investor incurs when they sell an asset for less than …