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Recent figures reveal a massive wave of liquidations impacting cryptocurrency short traders as Bitcoin and other digital currencies experience significant price surges.
Bitcoin Reaches Unprecedented High, Surpassing $111,000
Contrary to earlier bearish sentiments surrounding Bitcoin, the digital currency has outperformed expectations. It not only rebounded to its previous peak value but also shattered it, establishing a new benchmark near $111,800.
The graphic below illustrates the asset’s recent upward trajectory.
The coin's value has exceeded the prior high point of approximately $109,200 | Source: BTCUSDT on TradingView
After touching $103,000 earlier in the month, BTC appeared poised for a breakout, but it initially lacked the necessary momentum for a final push, resulting in a period of sideways trading. This situation has dramatically shifted in the past few days, with sustained buying pressure finally emerging.
Other cryptocurrencies have also seen gains recently; however, Bitcoin has performed best in weekly returns compared to most leading altcoins. As an example, Ethereum has risen by approximately 3.5% during this timeframe, less than half of Bitcoin’s 8.5% growth.
Crypto Liquidations Exceed $500 Million Over 24 Hours
Data sourced from
CoinGlass
indicates that the volatility sparked by the leading cryptocurrency has resulted in a substantial number of positions on derivatives exchanges undergoing liquidation within the last day.
“Liquidation” refers to the mandatory closure of an open contract when losses surpass a specific threshold (as determined by the platform where the position is held).
The following table presents relevant statistics pertaining to recent liquidations within the cryptocurrency market:
It appears short positions bore the brunt of the impact | Source: CoinGlass
As the data shows, the cryptocurrency market experienced an impressive $516 million in liquidations within the past 24 hours. Given the bullish price movement, it’s not surprising that short positions accounted for approximately 64% of the total liquidations ($334 million).
Looking at the breakdown by digital asset, Bitcoin and Ethereum contributed the most to the liquidations, as often occurs.
Liquidation heatmap for cryptocurrencies in the last 24 hours | Source: CoinGlass
A significant liquidation event, like the most recent one, is commonly referred to as a “squeeze.” Because short sellers experienced the greatest losses, this event is characterized as a short squeeze.
Despite the recent substantial liquidations, market participants don’t seem deterred. Bitcoin’s
Open Interest
continues its upward trend.
Bitcoin Open Interest data | Source: CoinGlass
“Open Interest” tracks the total number of BTC positions currently active on all derivatives platforms. This indicator currently stands at $81 billion, a notable increase from the $65 billion recorded on May 18th.
Featured image from Dall-E, CoinGlass.com, charts from TradingView.com
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