- Bitcoin is now trading close to $66,200 at which $10 billion worth of shorts could be closed out.
- Another set of liquidation levels are at $70,300 and $72,578 at which various forms of liquidation start to cause further rise in price levels.
- A short squeeze could produce fast price gains that could push the Bitcoin price to new high levels perhaps crossing $70,000.
The cryptocurrency market itself could be in the early stages of a significant short-squeeze as wobbly Bitcoin renews itself at $66,200. Market observers are interested in carrying liquidation rates, claiming that more than $10 billion of short positions could be forced out with price increases beyond this level. This development could set off a chain reaction which could force prices to increase in what appears to be a near vertical line.
At $66,200, Liquidation Could Trigger a Chain Reaction
Liquidation levels are a key metric in understanding market pressure. When a short position is liquidated, the trader is forced to buy the asset at the current price, which can lead to a sharp price increase if there is a large concentration of liquidations at a specific level.More so, a spot buy will be evident when Bitcoin hits $66,200, marking the elimination of about $ 10bn worth of short contracts.
Larger Liquidations Await at Higher Levels with a Short Squeeze
If this first round of liquidations is to occur then it could trigger a domino effect. Besides the $66,200, there are other two liquidation targets, which include $70,300 per short position of $16 billion and $72,578 for a short position of $18 billion.
These liquidations could potentially send the price of Bitcoin even higher if market conditions allow it as the chart below shows.Short squeeze is a situation characterized by a tightly short sold security experiencing an upward price shift that causes short-sellers to cover, thus increasing the price even further.
Current short positions have their worth pegged at billions; market prices may shoot through the roof should these situations take root. The pressure may lead to a sharp upward momentum, likely driving Bitcoin past $70000 and above.
disclaimer read moreCrypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.
