Thousands of Bitcoin Positions Forced to Close: Could Drive Prices Higher
It is stated that the liquidation of long positions in the Bitcoin futures market may have contributed to the formation of a local bottom.
According to a report published on the crypto analysis platform CryptoQuant, although price indicators are still in a downtrend and technical indicators indicate the possibility of further declines, the liquidation levels in long positions indicate that selling pressure is decreasing.
When there are significant price declines in the markets, the number of contracts opened in long positions tends to decrease rapidly due to liquidations. This situation also reduces the selling pressure in the market. This situation, which took place especially at the beginning of October, played a decisive role in Bitcoin's short-term price movements.
Could support Bitcoin price
On October 1, over 4,000 BTC long positions were liquidated, making it the second largest liquidation event of 2024, according to CryptoQuant data. According to experts, such high losses and liquidation moments usually cause local bottoms to form. This allows the market to recover in the short term and prices to rise again.
Buying pressure is needed
The report states that in the current situation, the price is likely to maintain the current range in the short term. However, it is emphasized that the purchasing power should be closely monitored in order for this recovery to be permanent and to compensate for the declines. If buyers can show enough strength, it is possible for prices to recover.
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