The digital currency space is currently undergoing a turbulent phase, with liquidation exceeding an alarming $210 million. Long positions have taken the hardest hit, accounting for a staggering 85% of the total losses during the recent market upheaval. Data provided by Coinglass reveals a 4% drop in the price of Bitcoin within a span of 24 hours, triggering liquidation events worth $210.26 million across both long and short positions, affecting a significant number of 92,298 traders.

The fallout of this recent market instability has primarily been felt by long positions, witnessing liquidations totaling a massive $178.2 million. Conversely, short positions have not been immune, facing liquidations amounting to $32.05 million. The sudden surge of liquidations on long positions, comprising almost 85% of the total liquidated assets, has dramatically transformed the market's sentiment from a bullish outlook to a more bearish one, evident in the widespread red indicators dominating the market landscape.

The ongoing market volatility can be traced back to Bitcoin's decline from its recent high of $67,183, recorded on April 23. This retreat led to a notable correction, resulting in the cryptocurrency dipping below the critical threshold of $64,000. As Bitcoin sets the tone for the larger digital currency realm, this bearish trend has had a ripple effect on altcoins, which have also witnessed a downturn in their prices.

Bitcoin, being the spearhead in the cryptocurrency arena, has witnessed the largest number of liquidated positions, adding up to a substantial $44.6 million within a 24-hour window. This unfolding scenario bears a semblance to an earlier incident on April 18, before the recent Bitcoin halving, which triggered a staggering $247 million liquidation loss. Nevertheless, the optimism sparked by the halving event on April 20 saw a resurgence in long positions as the market started its path to recovery.

Despite the surge in liquidations and the market turbulence, the derivatives market has observed a remarkable uptick in trading volume, surging by 30% in the past 24 hours and reaching a significant milestone of $159 billion. This spike in derivative trading activity points towards a heightened level of engagement and interest among traders, even amidst the ongoing market uncertainty.