Bitcoin
$100 Million Crypto Shorts See Success as BTC Surpasses $63,000
Data shows that the cryptocurrency derivatives market saw significant liquidations following Bitcoin’s rally above the $63,000 mark.
Bitcoin Rally Resulted in Short Liquidations in Derivatives Market
According to data from CoinGlassthe latest volatility in the cryptocurrency market has led to large liquidations on the derivatives side.”Sale off“here it naturally refers to the process that any open contract goes through, in which its platform forcibly closes it after accumulating losses of a certain degree.
The table below shows how derivatives settlements were in the last 24 hours:
It appears that the cryptocurrency derivatives market has seen total liquidations of $126 million over the past day. Of this, nearly $101 million of the contracts were short.
This figure is equivalent to over 80% of the total, implying that those investors betting on a bearish outcome for the market were the ones most affected by the most recent volatility. This naturally makes sense, as assets across the sector have seen green returns in this window, led by Bitcoin. race.
A mass liquidation event like the latter is popularly called a “squeeze“, and since the shorts were the side that contributed to most of these liquidations, the squeeze would be known as a “short squeeze”.
During a squeeze, liquidations end up further fueling the price action that caused them, thus triggering a cascade of additional liquidations. As such, the sharp price increase the previous day would be in part fueled by the short squeeze.
As for analyzing this latest squeeze for the various tokens, it appears that Bitcoin emerged victorious as usual with around $45 million in liquidations.
Ethereum (ETH) and Solana (SOL) made up the rest of the top three with $24 million and $8 million in liquidations, respectively. Interestingly, while most of the sector saw short liquidations dominate, fourth-place XRP (XRP) saw longs exit instead. This could be due to the fact that the coin, overall, only moved sideways while the rest recovered.
BTC managed to reclaim the $62,000 support level
With the latest rally, Bitcoin has staged a significant recovery, with its price even briefly rising above the $63,000 level earlier in the day.
The graph below shows how the currency increased:
According to data from the market intelligence platform Inside the BlockBitcoin is now floating above the significant on-chain support level of $62,000. “While resistance is strong above, sufficient bullish momentum could prevent selling pressure,” the analytics firm notes.
Featured image by Dall-E, CoinGlass.com, IntoTheBlock.com, chart by TradingView.com