Bitcoin Volatility in the Spotlight as Over $700M in Long Liquidation and Almost $600M in Short Liquidations Face Off

• A drop below $63,573 could liquidate over $724M in long positions, potentially causing a sharp market decline.
• A price rise above $65,707 could trigger $596M in short liquidations, pushing Bitcoin’s price even higher.
• High leverage increases risk, leaving both long and short traders vulnerable to sudden price swings.

Bitcoin is experiencing price movements that are positioning the market for potential liquidations. Data from CoinGlass shows a growing imbalance between long and short positions. Currently, long liquidation leverage is dominating the market which puts traders at risk.

Bitcoin Long Liquidation Leverage at Risk

Bitcoin’s price is fluctuating around $65,707 today. If it falls below $63,573, nearly $724 million in long positions could be liquidated. This means many traders have taken on too much leverage. As a result, a price drop could trigger a major market crash. 

If the price falls below $60,000, a wave of long positions will likely be liquidated, amplifying any downward price trend. With a big amount of long liquidation leverage concentrated in this price range, a correction might trigger a chain of sell-offs. 

Furthermore, Binance, OKX, and Bybit Exchanges are the primary sources of these long liquidation leverages. This hints that traders on these platforms are increasingly placing bullish bets on Bitcoin’s price.

Short Positions Face Pressure

The risk of long liquidation is high. However, short positions are also at risk. If Bitcoin continues to rise beyond $65,707and closes the month at this position, over $596 million in short positions could be liquidated. This could trigger a short squeeze, forcing traders to close their positions. 

As a result, prices might rise. However, the total short liquidation leverage is much lower than long positions. This means most traders are still betting on Bitcoin increasing, despite market volatility. Even though long liquidation leverage dominates, there is still pressure on short traders.

High Leverage Intensifies Risks

High levels of leverage amplify both long and short positions. Traders utilizing 100x, 50x, and 25x leverage are particularly vulnerable, because small fluctuations in the market can result in forced liquidations. This heavy reliance on leverage raises the possibility of crashing liquidations, in which a single price fluctuation causes widespread margin calls across the market.

Bitcoin’s price is at a critical point. With long liquidation leverage strongly concentrated below $63,573 and short positions likely to be pushed above $65,707, the market is set for potential volatility. The excessive use of leverage contributes to these risks, exposing both bulls and bears to strong liquidation pressures. 

disclaimer read more