According to data released by Coinglass on Monday, the cryptocurrency market has experienced a significant loss, with $900 million being lost the previous day.
The study states that long positions accounted for $764 million of the liquidations, while short positions accounted for $124 million.
Because positions on unregulated Bitcoin derivative exchanges may be aggressively terminated by the exchange’s risk engine once they reach the liquidation price, the liquidations brought to light the risks that traders face while trading on these platforms.
The paper claims that while a few liquidations may not have much of an influence on the market, thousands of positions liquidated at once can affect prices considerably and create a “cascading effect” that may liquidate more nearby positions.
Meanwhile, Bitcoin’s price took a further hit on Monday morning, dipping to $53,000 on Binance, its lowest level since late February this year. Coinglass noted that the cryptocurrency’s decline is attributed to a combination of factors, including uncertainty in the US economy, investor withdrawals, and increased market turbulence.
Crypto investment analyst Okoro Nnamdi shared his insights on the current state of Bitcoin, citing a highly anticipated liquidation due to the formation of a “cup and handle” pattern in technical analysis.
The cup and handle pattern indicate a potential breakout to the upside, as the price is expected to rise above the resistance level formed by the top of the cup.
“The liquidation is highly expected because Bitcoin is building what we call in technical analysis a ‘cup and handle’ formation. However, it is trying to close the CME (Chicago Mercantile Exchange) gap—a price gap on the CME Bitcoin futures chart—and consolidate for about two months before flashing a warning sign of a potential upside move,” Nnamdi stated.
Despite the expected liquidation, Nnamdi remained optimistic about Bitcoin’s long-term prospects, setting a target price of $150,000 for the cryptocurrency going into 2025.
“Overall, my target in Bitcoin going into 2025 is $150,000. The institutions are using this opportunity to accumulate the deep,” he added.
