Substantial Loss to Hit Bitcoin Short Traders at $70K
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In a recent post by a prominent firm, Ash Crypto. It was revealed that Bitcoin at the $70,000 level could trigger the liquidation of $1.6 billion in short trades. The possibility of price moving to this psychological level could have a great effect on the coin’s short traders, which could propel upward price movement in the future.
According to CoinMarketCap, Bitcoin is currently traded at $65,858. However, a trade on or above the $70k level can lead to a condition called ‘short squeeze.”
The Ripple Effect of Short Squeeze
Liquidation often occurs when short trade positions are closed untimely due to insufficient capital. This, in most cases, is triggered by sudden upside price movement.
However, as the price of BTC moves closer to the new forecasted high, traders in short positions might need to close their positions, resulting in the purchase of the digital asset at a higher value to reclaim losses. At this point, a ripple effect that could continually increase the coin’s price will set in due to increasing buying pressure.
Bitcoin’s Liquidation Trend
Currently, Bitcoin leads the liquidation table with $307.58k, and liquidated long trades take up 40.75% of this total. Historically, increases in BTC’s price have led to huge short-trade losses in a short period.
However, as BTC nears the $70k level, it suggests heightened volatility is around the corner. This kind of market condition could further lead to losses for Bitcoin and altcoin short traders due to the obscurity that surrounds the crypto market.
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