Bitcoin recently achieved a new record high by surpassing $72,380, leading to heightened risk for short sellers. This milestone places a considerable number of short positions under threat, with potential billion-dollar liquidations on the horizon if Bitcoin’s price increases by less than 10%. The exact level at which these liquidations could occur has become a focal point of discussion.
Risky Waters for Bitcoin Short Traders
Cryptocurrency analyst Ash Crypto has presented a chart showing the escalating risks for short sellers as Bitcoin climbs. The chart suggests that with the current price trends, over a billion dollars in shorts may be liquidated. Investors who bet on Bitcoin’s decline are now facing the challenging reality of a soaring market, possibly having to alter their investment strategies to mitigate risks.
The critical level for these investors is a Bitcoin price of $75,000, which could trigger the predicted significant liquidation event. Ash Crypto warns that breaching this price point could lead to a swift and substantial financial impact on those with short positions.
Speculating on Bitcoin’s Momentum
Amidst Bitcoin’s price rally, with a notable increase of over 10% in the past week, there are no clear signals that this upward trend will wane. Market analysts are continuously scrutinizing Bitcoin’s potential future movements, with divergent views on where the price may head next.
One such analyst, MarcPMarkets, suggests that Bitcoin might meet resistance and potentially drop below $70,000. Yet, he also highlights a scenario where closing above $71,500 could perpetuate the current positive trend. Presently, Bitcoin trades beyond $71,700, surpassing the threshold identified by MarcPMarkets and setting the stage for a potential surge towards $80,000 should it maintain a daily close above $71,500.
This remarkable ascent has had a pronounced effect on the market, with traders incurring losses reaching $333 million in just one day. Notably, a majority of these were long position liquidations, which accounted for over 64% according to Coinglass data. At the time of this report, Bitcoin’s valuation stands at $71,639.