Data indicates that a large amount of short positions on Bitcoin were liquidated after the cryptocurrency rose to the $79,000 level.
Bitcoin surpassed $79,000 for the first time since early February
Bitcoin has seen a continuation From its recent upward momentum over the past day as its price reached the $79,300 level after a jump of approximately 5%. The chart below shows what the cryptocurrency’s recent trajectory has looked like.
Bitcoin also made an attempt to recover last week, but that push ended in failure as the asset approached the $78,000 level. This new boom has taken the cryptocurrency beyond this mark, to levels not seen since the first few days of February.
Since the rise was sharp, it unleashed a wave of chaos on the derivatives side of the sector.
A large amount of BTC liquidations have accumulated on exchanges
According to data from Queen GlassBitcoin has seen a notable amount of liquidations following volatility over the past 24 hours. “filteringHere it refers to the forced closure that any open contract is subjected to after it has accumulated losses to a certain degree.
Below is a heat map showing how daily liquidations compare between different assets in the sector.
Bitcoin appears to have been the top contributor to liquidations in the market as usual, with more than $222 million of positions related to the asset liquidated over the past day. About $205 million of these positions were short positions, meaning bearish bets accounted for the vast majority of liquidations.
Naturally, short trades are the most affected side, due to the fact that the cryptocurrency saw a sharp rise within this window. Ethereum, which saw the second-largest derivatives inflow, also saw short compensation of $99 million out of a total liquidation of $115 million.
In total, the digital asset sector as a whole saw approximately $449 million in liquidations in the past 24 hours.
From the table, it appears that $365 million or more than 80% of this liquidation involved short positions, which reinforced the bullish wave that the sector as a whole witnessed in this period.
A mass liquidation event like what’s happening today is known as a “squeeze.” Since the latter event mostly involved shorts, it will be called the Short squeeze. Generally, these events begin after a sharp swing in price unleashes an initial wave of liquidation. This flow then gets back into motion, triggering further liquidations in the market.
In the cryptocurrency sector, such events are not exactly a rare sight due to the volatility that coins tend to see on a regular basis and the widespread use of leverage among derivatives traders.
