Bitcoin Short Sellers Face Potential $1.67B Liquidation If Value Returns to $70,000
Summary:
Bitcoin short sellers could face a massive $1.67 billion liquidation if the cryptocurrency rebounds to $70,000, a value it hasn't reached since June 8. The total open interest of Bitcoin futures has decreased 10.99% since its all-time high on June 7, and now sits at $33.55 billion, yet it's still 82% higher than at the start of 2021. Crypto analysts suggest a significant liquidation event could set the stage for Bitcoin to reach new all-time highs.
People betting against Bitcoin (BTC) might be privately praying that the digital currency doesn't surge back to $70,000 anytime soon, as such a move could trigger a colossal $1.67 billion liquidation of short positions. CoinGlass data reveals that Bitcoin has been trading beneath this threshold since June 8. Over the last week, its value has dipped by 3.23%, according to CoinMarketCap.
Ash Crypto, a crypto trader hiding behind a pseudonym, noted on June 17 that a massive accumulation of Bitcoin short liquidations is visible at the higher side. CoinMarketCap suggests an increase of 7.46% from its current rate of $65,136 would rocket it to $70,000.
Joshua Jake, CEO of Discover Crypto, considers the current market extremely optimistic on June 18, stating that Bitcoin and ETH liquidations are accumulating and a bounce-back is on the horizon.
The total open interest (OI) in Bitcoin futures, meaning all outstanding or unsettled contracts across all exchanges, has seen a 10.99% drop since reaching its pinnacle on June 7 and now stands at $33.55 billion. However, since this year's outset on Jan. 1, Bitcoin's OI has surged by 82%.
A plummeting open interest often indicates a weakening trend. In contrast, a rising open interest points to mounting market enthusiasm. Just before June 7, Bitcoin's OI quickly swelled by more than $2 billion within three days, igniting speculations about an abrupt price fluctuation.
Willy Woo, a crypto analyst and the mind behind the onchain data source, Woobull, argues that a significant liquidation purge would pave the way for Bitcoin to establish new all-time highs. He conveyed this opinion on June 19, pointing out that more liquidations are necessary for further bullish momentum.
Echoing Woo's sentiments, Julien Bittel, Head of Research at Global Macro Investor (GMI), referred to Bitcoin's current price activity as "boring" after the Bitcoin halving event on April 20.
This report does not offer investment guidance or suggestions. Any investment or trading action comes with risk, and readers are urged to undertake their own inquiries before proceeding.
Published At
6/20/2024 8:47:03 AM
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