Bitcoin has seen a significant price rally, climbing to its highest level in weeks. This recent surge, around 6% in the past 24 hours, has brought the cryptocurrency closer to surpassing its previous highs from September, positioning it at levels not seen since mid-year.
Other cryptocurrencies have followed suit, with Ethereum (ETH) and Solana (SOL) outperforming Bitcoin during this upswing, recording gains of 8% and 7%, respectively. This increased volatility has heavily impacted the crypto derivatives market, resulting in substantial liquidations.
Data shows that over $230 million in derivatives contracts were liquidated in the past day. The majority of these liquidations, approximately 85%, were from short positions, as traders betting on a price decline suffered major losses. Bitcoin led the liquidation figures, accounting for nearly 40% of the total, followed by Ethereum. Other notable liquidations occurred with Solana, SUI, and NEIRO, all experiencing significant contract closures.
This event is considered a short squeeze, where the closure of short positions accelerates the upward price movement, creating a feedback loop that results in further liquidations. This cycle adds to the market’s volatility, making the situation even more unpredictable.
As Bitcoin continues its climb, the mass liquidations suggest that the market remains highly volatile, with the potential for further price fluctuations and liquidations in the near future.
