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Record $1 Billion In Shorts Risk Liquidation If Bitcoin Hits This Price

The Bitcoin price is creeping up once again, rising to a new all-time high above $71,000 in the early hours of Monday. As the price surge continues, it has put a record number of shorts at risk, where a less than 10% move upward from here will see $1 billion in shorts liquidated.

$1 Billion In Shorts At Risk Of Liquidation

Crypto trader and analyst Ash Crypto took to X (formerly Twitter) to share a map that showed the number of short positions at risk as the price of Bitcoin rises. The map shared in the post showed that short liquidation leverage had risen above $1 billion.

These short leverage positions had been rising along with the price with a large number of crypto investors expecting the price to crash after pumping to a new all-time high. However, Bitcoin seems to have other plans in mind with its price surging close to $72,000 and increasing the risk of liquidations for these positions.

For these positions, Bitcoin reaching $75,000 would be detrimental to them. At this price level, over $1 billion worth of short positions will be liquidated. “$1,000,000,000 WORTH OF SHORTS WILL GET LIQUIDATED IF BTC HITS $75,000,” Ash Crypto revealed.

Will Bitcoin Stop Anytime Soon?

The Bitcoin price has seen a 10.33% increase in the last week and shows no signs of stopping soon. However, the debate of whether it continues upward or downward continues to wax strong as crypto analysts far and wide proffer their own predictions.

One crypto analyst know as MarcPMarkets suggests that the price of Bitcoin could hit resistance and then spiral back down if Bitcoin fails to properly clear the $70,000. But the analyst also explains that there is a possibility that the positive price action does continue if price does push above $71,500 and makes a close above it.

At the time of writing, Bitcoin is trading above $71,700, which shows it has cleared the level highlighted in the analyst. Now, what remains is to see if the cryptocurrency is able to make a daily close above $71,500, something that would be incredibly bullish for price. In this case, the BTC price could rise as high as $80,000 following this breakout.

The Bitcoin move over $71,000 has already had a significant impact on traders in the last day. Over $333 million has been lost by traders in one day. But interestingly, the majority of liquidations (64.29%) happen to be long positions, according to data from Coinglass.

Bitcoin price chart from Tradingview.com

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Binance & Deribit Traders Aggressively Short Bitcoin, Squeeze Incoming?

Data shows Bitcoin shorts have been piling up on cryptocurrency exchanges Binance and Deribit during the past few days.

Bitcoin Funding Rates On Binance & Deribit Are Deep Red Right Now

According to data from the analytics firm Santiment, traders on the derivative market have continued to bet against the cryptocurrency recently. The relevant indicator here is the “funding rate,” which keeps track of the periodic fee that derivative contract holders on an exchange are paying each other right now.

When this metric has a positive value, it means that the long traders are paying a premium to the short traders in order to hold onto their positions. Such a trend suggests that the majority sentiment on the given exchange is bullish currently.

On the other hand, the metric being under the zero mark implies the traders on the platform hold a bearish mentality at the moment, as the shorts are the dominant force.

Now, here is a chart that shows the trend in the Bitcoin funding rates for Binance and Deribit over the past month:

Bitcoin Funding Rates

As displayed in the above graph, the Bitcoin funding rate for both of these exchanges had been mostly positive during the last third of August and the starting third of this month, implying that the majority of the traders had been longs.

The bets of these holders had failed, however, as the price had seen an overall downtrend in this period. Since the rebound earlier this month, though, the sentiment has flipped in the market as shorts have piled up on both of these platforms.

These short traders haven’t been successful so far, either, as the value of the cryptocurrency has seen net growth since they have appeared. Historically, the market has actually been more likely to go against the expectation of the majority, so this pattern may be in line with that.

The reason why the asset would move against the bets of these contract holders is that mass liquidation events, called squeezes, become more likely to happen the more lopsided the sector is.

A large amount of long liquidations can amplify crashes, while short liquidations can provide the fuel for upward surges. Since Bitcoin is still seeing aggressive shorting, it may be a positive sign for the cryptocurrency’s current price rise, as a potential short squeeze could help it extend further.

Interestingly, while Bitcoin is being bet against right now, Ethereum’s funding rates are positive, as pointed out by analyst James V. Straten in a post on X.

Bitcoin Vs Ethereum Funding Rates

From the graph, it’s visible that the funding rates of the top two assets in the sector have gone opposite ways recently. This means that while BTC may be able to build an uptrend off the shorts, ETH could face the opposite effect if the longs end up being liquidated.

BTC Price

Bitcoin has seen a drawdown of about 1.5% today as the asset’s price has now dropped towards the $26,700 level.

Bitcoin Price Chart

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Bitcoin Short Squeeze: $93 Million Shorts Liquidated In One Hour

Data shows a large amount of shorts have been liquidated in the Bitcoin futures market in the past day as BTC pushes above $19,000.

$93 Million Bitcoin Shorts Were Wiped Out In Only 1 Hour

As per data from the on-chain analytics firm Glassnode, short liquidations have spiked in the past day. A “liquidation” takes place when a derivative exchange has to forcibly close up a contract on the Bitcoin futures market.

Contracts usually liquidate when a certain percentage of the margin – the collateral amount that the holder had to put up in order to open the position, is lost due to the BTC price moving opposite to the direction the investor bets on.

In the crypto futures market, large liquidations happening at once isn’t an uncommon sight due to a couple of reasons. First, most of the assets in the sector are generally very volatile, so sudden price swings can take place without warning.

And second, many derivative exchanges offer leverage (a loan amount taken against the margin) as high as 100x in the original position. High leverage being accessible in a volatile environment like this results in a large risk of positions being liquidated.

Now, the relevant indicator here is the “total futures liquidations,” which tracks the total amount of both short and long liquidations that are taking place in the Bitcoin futures market currently.

Here is a chart that shows the trend in this metric over the last few months:

Bitcoin Futures Liquidations

As displayed in the above graph, the Bitcoin futures liquidations have mostly involved short contracts in the last few days. This trend makes sense, as a sharp upwards move in the price was the trigger for these liquidations.

During the FTX crash back in November, which observed the opposite kind of price move, a large number of longs were wiped out instead, as can be seen from the chart.

Usually, a large enough rapid move in the price can trigger simultaneous mass liquidations that only feed said price move further. This amplified price move then liquidates even more contracts, and in this way, liquidations cascade together. A mass liquidation event like this is popularly called a “squeeze.”

Glassnode notes that $93 million in short contracts were flushed in just a single hour during the past day. These rapid liquidations suggest the Bitcoin rally triggered a short squeeze in the futures market.

The price has now shot up even more following this squeeze, as is generally the case, and BTC is now above $19,000 for the first time since the collapse of the crypto exchange FTX.

BTC Price

At the time of writing, Bitcoin is trading around $19,000, up 13% in the last week.

Bitcoin Price Chart

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Crypto Shorts See $240M Flush As Bitcoin Rebounds Back Above $30k

Data shows the crypto futures market has taken a $380 million beating over the past day as Bitcoin has rebounded above $30k. Out of this amount, $240 million liquidations have belonged to short traders.

Crypto Shorts Observe $240 Million In Liquidations Over Last 24 Hours

In case anyone isn’t aware of what “liquidations” are, it’s best to first take a brief look at the workings of margin trading in the crypto futures market.

When an investor opens a, say, Bitcoin long or short contract at a derivatives exchange, they first have to put forth some collateral called the “margin.” This margin can be in BTC, any other coin, or even fiat.

Against this margin, the investor may choose to take on “leverage,” a loaned amount often many times the initial position.

The advantage of leverage is that if the price moves in the direction the contract bet on, the profits earned are then many times more now.

Related Reading | Bitcoin Bloodbath Awakens Sleepy Giant As Spot Volumes Surge

However, it is also true that any losses incurred will also be multitudes more. When such losses eat up a specific portion of the margin, the exchange forcefully closes off the Bitcoin position.

This is what a liquidation is. The below table shows the data for liquidations in the crypto market over the past day.

Looks like liquidations in the futures market have amounted to about $380M In Last 24 Hours | Source: CoinGlass

As you can see above, the crypto market has suffered some heavy liquidations over the past day, with $184 million coming in the past 12 hours alone.

A majority of the liquidations have been from short traders, which makes sense as coins like Bitcoin have observed a big rebound in the price today.

Around 63% of the liquidations have involved shorts | Source: CoinGlass

Looking at the above data, it seems like more than $240 million liquidations have been short traders getting flushed.

Related Reading | Bitcoin Crash 20% in 5 Days. Why is it the Golden Time to Enter the Crypto Market?

Large liquidations like today’s aren’t particularly uncommon in the crypto market. There are a couple of reasons behind this.

The first is the high volatility of coins. Even the biggest coins like Bitcoin and Ethereum can observe rather large swings in a short timespan.

The other factor that contributes to this is the fact that many derivatives exchanges offer as high as even 100x leverage.

Uninformed traders opting for such large positions in a volatile market like crypto greatly increases the risk of liquidations.

Bitcoin Price

At the time of writing, Bitcoin’s price floats around $30.5k, down 15% in the past week.

The price of the coin seems to have already observed a rebound from the crash | Source: BTCUSD on TradingView
Featured image from Unsplash.com, chart from TradingView.com

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Five Bitcoin Short Films For A Lazy Holiday Evening: Energy, Money, &… Basket?

Happy Holidays from the NewsBTC team. We come bearing gifts. The cure for those suffering from cryptocurrency withdrawal syndrome. Spend the evening learning about Bitcoin in the most relaxed way possible. These five films were released throughout 2021 and contain the alpha everyone needs for the years ahead. At least the first four do, the fifth one has nothing to do with Bitcoin except for one small detail.

Related Reading | The First Interactive NFT in the World – VR Movie on Mars

Our sister site Bitcoinist covered the films and most of the accompanying text comes from those articles. Is there a better time for these films to make an appearance in NewsBTC than this lazy evening? Grab your beverage of choice, heat up those leftovers, and hit play in the one that interests you the most. Chances are you’ll end up watching them all.

Once again, happy holidays and happy watching!

Bitcoin Short #1- “This Machine Greens” (38 mins)

Is Bitcoin mining’s energy consumption a bug or a feature? This documentary’s “thesis is that the process is “a net positive for the environment.” The aim was to “dispels many of the misconceptions about Bitcoin mining.” Directed by  Jamie King, of “Steal This Film” fame, and produced by Enrique Posner and Swan Bitcoin. 

From the Bitcoinist’s coverage, in Part 1 they focus on the Petrodollar system:

“Watch “This Machine Greens” to learn how the US Military literally backs the Petrodollar. And, of course, the US Military uses infinite energy year after year. Learn about the deal that the US made with Saudi Arabia. The US was to protect the Middle East. The Saudis promised that “The global oil market will be denominated in and conducted with dollars. Ensuring a constant global demand for the currency.” Think about the results of this crucial deal.”

From Bitcoinist’s coverage, in Part 2 they explain how Bitcoin mining will fund green energy initiatives:

“According to Alex Gladstein, Bitcoin can fund the “Electrification of new areas and creation of new economic activity.“ This machine greens, if you will. And if we’re talking infrastructure for clean energy, Magdalena Gronowska breaks it down:

 “It’s derisking constructions of renewable energy facilities. It’s derisking it because it’s willing to buy 24/7, 365. And when you have a predictable buyer, a predictable revenue stream, it’s easy to plan out your operations. And that certainty means that that site gets built.”

Bitcoin Short #2- “Human B” (73 mins)

This recent German documentary is one of the best introductions to Bitcoin produced to date. On top of that, directors Aaron Mucke and Eva Mühlenbäumer created a slick audiovisual piece that flows like a river and is an aesthetical pleasure to watch. 

In Bitcoinist’s coverage of the documentary, they introduce it like this:

“Human B” shows us how people in Germany and Austria view the Bitcoin phenomenon. This is a worldwide movement, and it’s important to listen to all the voices out there. In the documentary, we get to hear from Bitcoin authors like Der Gigi and Anita Posch. From economist and punk rocker Marc Friedrich and journalist Friedemann Brenneis. Plus, from a normal person like Jan, who ends up being the star of the show.

The documentary takes a surprising left turn when it travels to Caracas, Venezuela. There, we hear from Alessandro Cecere AKA El Sultán del Bitcoin, and from Juan José Pinto from Doctorminer.”

#3- “Hard Money” (34 mins)

This one is not about Bitcoin per se. This Bitcoin short is about money. To understand why Bitcoin is so important for the planet, people might need a refresher course on what money actually is.  This documentary is analogous to the first few chapters of Saifedean Ammous’ “The Bitcoin Standard,” and features sound bites from some of the most important Bitcoin philosophers out there. Directed by Richard James.

In Bitcoinist’s coverage of the film, they convince you to watch it with this:

“Watch the “Hard Money documentary and you’ll be able to answer these questions: Why was gold chosen as the premier form of hard currency? What were gold’s “severe flaws”? What is inflation and how does the government hide it? How breaking the relationship between the Dollar and gold broke the relationship between the market and reality. What is low and high time preference?  What does fractional reserve banking create? Why are the institutions that issue debt effectively printing new money?”

BTC price chart on Bitbay | Source: BTC/USD on TradingView.com
Bitcoin Short #4- “Bitcoin Is Generational Wealth” (15 mins)

This one is not a documentary, even though it uses some of the genre’s techniques. Also, this is the only specimen on this list that didn’t get a positive review from Bitcoinist. Why is that? We won’t spoil it for you. Watch the film first and then read the linked text. Directed by Matt Hornick. Written and narrated by Tomer Strolight.

In Bitcoinist’s bad review of the film, we find this quote:

“Half speculative fiction, half predictive programming, “Bitcoin is Generational Wealth” is in a genre of its own. Using high-quality stock footage to produce a professional montage, the film should work. But it doesn’t. Is the script to blame? Probably. The film shows an idyllic future that every Bitcoiner has dreamt about, but it doesn’t explain how we get there. It takes the “Bitcoin fixes this” meme to its ridiculous extreme.”

#5- “Lynchpin” (21 mins)

This one is about amateur basketball. Its only link to Bitcoin is that Swan and the Bitcoin Movie Club financed and produced it. Is this the first of many or a one-time thing? Word on the street is that the companies will finance several chapters of this story, but don’t quote us on that. “Lynchpin” was supposed to be a TV show, so it sounds possible on that end. We’ll keep you all posted. Directed by Mike Nicoll.

In Bitcoinist’s presentation of the short film, they introduced it as follows:

“Compton Magic’s Etop Udo-Ema, “America’s most recognized basketball powerbroker,” is “Lynchpin’s” star. Before Covid hit, this charismatic man receives an offer that he can’t refuse. The whole short film follows him trying to change sponsors and create a league. That carries Etop to Roc Nation and its boss Jay Z, who happens to be Puma’s creative director. The whole enterprise seems to be on its right track. No one could predict the monkey wrench that hit the world’s engines.”

Related Reading | Miramax Sues Quentin Tarantino Over “Pulp Fiction” NFTs. Tarantino Moves Forward

And that’s enough Bitcoin for tonight. Happy holidays!

Featured Image by Bru-nO on Pixabay | Charts by TradingView

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Crowded Bitcoin Shorts Leads To Largest Recorded Squeeze In History

Data shows that on Monday crowded Bitcoin shorts have lead to the largest recorded squeeze in the history of the cryptocurrency.

Bitcoin Records Largest Short Squeeze Ever

As per an Arcane Research report, BTC has recorded the largest squeeze in its history where $750 million worth of shorts have been liquidated.

Here is a chart that shows the data for Bitcoin short liquidations over the past one year:

Bitcoin Short Squeeze

BTC short squeeze spikes | Source: Arcane Research

As is clear from the above graph, the short squeeze seen on Monday, 26 July, hasn’t been observed in the past year. In fact, it’s the largest ever in the crypto’s history, surpassing the infamous 2017 short squeeze that lead to BTC reaching its then all-time-high.

Related Reading | Bitcoin Indicator Forecast Calls For $46K, New All-Time Highs Possible

Before yesterday, BTC had been floating in the low $30ks for quite some while with its price seemingly being on a gradual decline. As a result, high leveraged BTC short positions had been accumulating.

Due to the Amazon rumor that the ecommerce giant would start accepting cryptocurrency payments, BTC had a sudden surge in price that took it from 34.5k to 39.5k.

As this rise was totally unexpected, short sellers hurried to squeeze their shorts in order to cut their loses. And this short squeeze was so large that at least $750 million shorts were liquidated.

An interesting thing is that Binance, the largest crypto exchange by market volume, made a change to their API after the crash in May. With this modification, the API only publishes data for one liquidation for second.

This means that any data coming from Binance would be quite underestimated. Hence why “at least” $750 millon in shorts were liquidated. The real figure is almost definitely much higher than that.

BTC Price

At the time of writing Bitcoin’s price is trading around $37.7k , up 27% in the last 7 days. Over the past month, the crypto has gained 14% in value.

Here is a chart that highlights the trends in the price of the coin over the last one year:

Bitcoin Price Chart

BTC gains a sharp upwards trend | Source: BTCUSD on TradingView

After being stuck in the $30k to $35k range for a while, Bitcoin has finally managed to break through the range bound market.

The crypto momentarily touched the $40k mark, but it fell down quickly to these levels. Amazon came forth and confirmed that the rumor that was behind the surge in the price is false, and that has driven the price to down $37k.

Related Reading | How The 55% Bitcoin Correction Revives Comparisons To Past Bull Cycle

It’s unclear where the coin will head next, but some volatility at last is sure to at least keep the price moving, whether downwards or upwards.

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Over $800 Million Bitcoin Shorts Liquidated As Price Surges 12% In 24 Hours

Bitcoin price continues to see incredible movements over the past 24 hours. The price of the coin has moved over 10% as the crypto market sees increasing momentum. The movement comes hot on the heels of the news breaking of rumors of Amazon integrating bitcoin payments in their platform. The market seems to have taken this and just run with it.

Although the news is yet to be confirmed, investors continue to rush to buy the digital asset. The price surge has led to hundreds of millions of shorts being liquidated in just a 24-hour time frame. So far, the market has seen over $1 billion shorts liquidated in just 24 hours as bears take hit after hit in the market.

Related Reading | Number Of Investors Holding Bitcoin Tripled In Last Three Years

Bitcoin which had been trading mostly steady at the $34,000 price point throughout the weekend had started seeing noticeable movement as the weekend drew close. There’s a couple of factors that seem to have contributed to the uptick in price. News ranging from Musk making confirmations that he held bitcoin, and so did his companies Tesla and SpaceX seem to have been a catalyst for it. Then the Amazon rumor helped to push it over the edge.

Market Reaction To Elon Musk’s Amazon

Billionaire Elon Musk was on The B Word conference with CEO of Ark Invest, Cathie Wood, and Twitter CEO Jack Dorsey to talk about the digital asset. It was during this conference that Musk had confirmed that SpaceX and Tesla did indeed hold bitcoin on their balance sheets.

Following this announcement, the price of the digital asset finally broke $32,000 and continued to slowly trend upwards after a small dip. This completely turned what the market had expected to be a continuing downturn into an upwards market. But at this point, there still was not enough price uptick to make shorter liquidate their positions.

Related Reading | SpaceX Has Bitcoin On Its Balance Sheet, Elon Musk

With the price of the digital asset surging to $39,000 in just the span of a few hours, shorters are now recording significant losses as bears rush to liquidate their shorts positions on exchanges.

Binance alone had recorded the liquidation of shorts to the tune of over $100,000,000 in just a few hours after the price surge began. The digital asset price had surged to as much as $48,000 on Binance Futures in the same time period.

Crypto Shorts Liquidations Across Exchanges

Reports show that over $1 billion shorts have been liquidated from exchanges in the last 24 hours. The largest amount of liquidations so far has been on Binance. And bitcoin liquidations account for over 72% of the liquidations being carried out.

Related Reading | Bitcoin Volume Continues To See Yearly Lows As Price Struggles To Recover

Most of the liquidations happened in the span of 12 hours. With the single largest liquidation happening on Huobi-BTC that saw a $29.3 million position liquidated as the market rages on.

Ethereum and Monero follow behind bitcoin for the largest number of positions being liquidated in the market in the past 24 hours. With Dogecoin liquidations running up behind Monero.

The recent price surge has seen bitcoin add over $100 billion to its market cap as the price currently trades for $38,164 according to TradingView.com at the time of this writing.

Bitcoin price chart from TradingView.com

BTC price closes in on $40,000 | Source: BTCUSD on TradingView.com
Featured image from SwissBorg, chart from TradingView.com