$202 Million In Long Liquidations Rock Bitcoin Market — What’s Next For BTC Price?
Over the weekend, Bitcoin’s price extended its disappointing performance, falling to around $103,000 in the early hours of Saturday, May 31st. While the premier cryptocurrency seems to have recovered fine in the previous day, its price is still more than 6% away from the recently achieved all-time high of $111,814. Surprisingly, the latest on-chain data suggests that the Bitcoin price could resume its upward trajectory anytime from now.
Mass Long Liquidations Could Mean Sustained Upward Trend For BTC
In a Quicktake post on the CryptoQuant platform, on-chain expert Burak Kesmeci shared that the Bitcoin market witnessed its third-largest long liquidation in the month of May. Data from CryptoQuant shows that $202 million in BTC long positions were liquidated on the Binance derivatives exchange on Friday, May 30th.
As highlighted by Kesmeci, leveraged trading and speculative pressure increased on the world’s biggest crypto exchange as the price of Bitcoin rallied from around $94,000 to a new record high above $111,000. These long liquidations typically occur when derivatives traders are forced to close their positions as prices move sharply against them, leading to automatic sell-offs that can further trigger volatility in both directions.
The latest event— including $202 million worth of BTC long positions— is the third-largest in the previous month, trailing only 2 larger liquidations in May: $211 million on May 12 and $277 million on May 23. This series of high-value liquidations indicates the increased speculative activity in the Bitcoin market over the past couple of weeks. While the investors who suffered this liquidation might feel hard done by the market, these mass liquidations could be positive for the flagship cryptocurrency— a healthy reset for what is starting to feel like an overheated market.
By removing excessive leverage, the Bitcoin market can restore a more stable foundation for price discovery and an ongoing upward trend.
Bitcoin Funding Rates Still Extremely Low: Analyst
According to another on-chain analyst with the pseudonym Darkfost, the Bitcoin funding rates are still at extremely low levels. This trend signifies the hesitation and reluctance of traders to open new long positions.
