Key Points
- Bitcoin [BTC] recently experienced a significant price spike, with relatively low liquidation volume.
- Market patterns suggest less leverage or better preparedness for volatility as Bitcoin exceeded the $66,000 threshold.
Bitcoin [BTC] saw a significant price increase recently, reaching the $66,000 zone. This triggered a series of market liquidations. However, the volume of liquidations was surprisingly low, given the substantial price movement.
Bitcoin’s Lower Liquidation Volume
An analysis of the Bitcoin liquidation data from Coinglass for the recent price spike above the $66,000 mark on 19th July revealed some interesting dynamics.
The total liquidation volume recorded was just over $64 million. Of this, short liquidations accounted for the majority, with approximately $51 million, while long liquidations contributed around $13.7 million.
This relatively lower liquidation volume is especially noteworthy when compared to previous instances.
For instance, when Bitcoin’s price reached around $56,000 on 8th July, the total liquidation volume was substantially higher at over $170 million.
Reasons for Lower Bitcoin Liquidation
This trend suggests that the market was less leveraged or better prepared for volatility as Bitcoin approached and exceeded the $66,000 threshold.
Traders might have adjusted their strategies or positions in anticipation of potential price movements, leading to fewer liquidations despite significant price changes.
This could also indicate a shift in market sentiment or a different composition of market participants compared to earlier in the month.
Also, analysis of the Bitcoin weighted funding rate and open interest offers valuable insights into the current trading dynamics.
The weighted funding rate has been rising. This increase typically indicates that the demand to hold long positions is strong.
Concurrently, the uptrend in open interest further underscores the increasing market involvement. With open interest now over $36 billion, it suggests that more capital is entering the market.
As of this writing, Bitcoin was trading at approximately $66,900. It experienced a slight decline of less than 1%, slightly offsetting the gains from the previous trading session.
During that session, it saw an increase of about 0.6%, which had briefly pushed its price above $67,000. Despite this minor pullback, its overall trend remained strong.
