• In the past day, $93 million worth of Bitcoin shorts were liquidated in the futures market as BTC price surged above $19,000.
• Liquidations occur when derivative exchanges must close a contract due to a certain percentage of the margin being lost.
• Data from on-chain analytics firm Glassnode shows that total futures liquidations have increased significantly in the past few months.
As Bitcoin continues to make all-time highs, the crypto derivatives market has seen a major shake-up in the form of massive liquidations of short contracts. Over the past day, over $93 million worth of Bitcoin shorts have been liquidated on the futures market, as the leading cryptocurrency pushes above the $19,000 level.
A liquidation is when a derivative exchange must close a contract due to a certain percentage of the margin being lost. This can happen when the price of Bitcoin moves in the opposite direction to the one the investor bet on. In the crypto derivatives market, high leveraged positions are particularly vulnerable to liquidations due to the volatile nature of the asset.
Data from on-chain analytics firm Glassnode shows that total futures liquidations have been on a steady increase over the past few months. The ‘total futures liquidations’ metric tracks both short and long liquidations that are taking place in the Bitcoin futures market. The graph below illustrates the trend in this metric over the last few months:
As the graph suggests, the value of this metric has been consistently high over the past few months, indicating that the crypto derivatives market is becoming increasingly volatile. This could be due to a number of factors, such as institutional investors entering the space and the increased demand for Bitcoin futures contracts.
The spike in short liquidations in the past day may be a sign that the market is expecting more gains in the near future. This could be a result of investors taking advantage of the current bullish momentum in the market and betting on further price appreciation in the near term.
Regardless, the futures market is an important indicator of the short-term sentiment in the crypto market and the recent liquidations suggest that investors expect more gains in the near term. This could be a sign that the bullish momentum is likely to continue in the coming days.