Bitcoin is within reach at $70,000, which may trigger $1.6 billion in short-term liquidations!
Bitcoin prices are approaching the $70,000 mark step by step, making the cryptocurrency market more and more volatile. As prices continue to rise, the market may also see some changes. Recently, market observer Ash Crypto mentioned in a tweet that if Bitcoin really reaches $70,000, then $1.6 billion worth of shorts will be liquidated.
This rise in Bitcoin has put a lot of pressure on short sellers. They originally borrowed Bitcoin, then sold it at a high price, and waited for the price to fall before buying it back at a low price to make a profit. But now, if the price keeps rising, they will lose money, and may even be forced to buy back their positions to prevent further losses. In this case, we call it a "short squeeze."
Speaking of this liquidation, it is quite considerable. When a short position is automatically closed due to insufficient collateral, it is usually caused by price changes. As soon as the price of Bitcoin rises, those who hold short positions have to buy back Bitcoin at a high price to end the transaction. In this way, buying pressure drives the price up again, forming a continuous upward cycle.
Bitcoin's liquidation volume is as high as $3.0758 million, of which $182.24 million is short liquidation. Moreover, Bitcoin's open interest has fallen by more than $1.2 billion in the past few hours.
In addition to Bitcoin, Hamster Kombat's liquidation amount is also not small, exceeding $2.438 million. Long liquidation amount is $1.158 million and short liquidation amount is $1.2801 million.
In the past, there have been many examples of large-scale short liquidation in the Bitcoin market. As soon as the price soared, billions of short positions were liquidated and wiped out in just a few hours. Just like in the first 11 months of 2023, Bitcoin rose 130% to $37,800, and short sellers suffered heavy losses of more than $6 billion at that time.
