Key Points
- Bitcoin has seen significant long liquidations despite its bullish trend.
- These liquidations are due to price volatility and overly optimistic traders.
Bitcoin (BTC) has shown a bullish trend in spite of recent price fluctuations.
The current trading session has seen a high volume of long positions being liquidated.
Long Liquidations Dominate
Bitcoin’s liquidation chart on Coinglass reveals that the first day of the month saw liquidations surpassing $280 million.
Long liquidations made up the majority of this volume, reaching over $231.6 million while short liquidations were considerably lower, around $60.8 million.
This dominance of long liquidations was not a one-off event; Bitcoin has been seeing a surge of long liquidations in the days prior.
This pattern indicates that traders were extremely hopeful about Bitcoin’s price movements, leading to a larger volume of long positions being liquidated when the market turned.
Understanding the Cause
Despite Bitcoin ending the previous trading session with an over 1% increase, long liquidations prevailed due to significant intraday volatility.
Bitcoin started trading at roughly $64,609 but subsequently fell to around $62,212. This sharp decrease triggered the large volume of long liquidations.
By the end of the day, Bitcoin had bounced back and traded at about $65,288.
At the time of writing, Bitcoin had dropped by over 1% and was trading at around $64,254. If this trend persists, another day of long liquidation dominance is likely.
Bitcoin’s volume trend on Santiment indicated a decent trading volume with the highest volume in the previous trading session reaching around $41 billion.
Despite the current price trend favoring sellers, there is potential for a shift if buyers can take control of the market. This could possibly reduce the dominance of long liquidations and stabilize the price movement.
