By Nermeen Nabil 
The cryptocurrency market is experiencing increased fluctuations as Bitcoin inches closer to a psychological threshold of $70,000. With rising prices comes the possibility of market shifts. According to a recent tweet from prominent market watcher Ash Crypto, “$1,600,000,000 worth of shorts will get liquidated if Bitcoin hits $70,000.”
Short sellers face pressure as Bitcoin’s surge threatens $1.6 billion in liquidations
Short sellers borrow BTC to sell at a higher price, expecting it to drop in value so they can repurchase it at a lower price and pocket the difference. However, if the price continues to rise, they face losses and are often forced to buy back their positions to prevent further damage. This phenomenon is known as a short squeeze.
The recent tweet’s estimate of $1.6 billion in liquidations is quite remarkable.” Liquidations happen when short positions are automatically closed because of insufficient collateral, usually caused by price changes taking place. As the price of Bitcoin goes up, those who have taken short positions might need to close their trades by purchasing BTC at higher values. This buying pressure results in price escalation, establishing a cycle of continual upward movement.
Source: Coinglass
Bitcoin led the liquidations rank, with $307.58k, of which $125.34k million were liquidated long positions and $182.24k were short positions. Notably, Bitcoin’s open interest (OI) has dropped by more than $1.2 billion in the past few hours.
Hamster Kombat follows BTC closely with over $243.80k in liquidations, with long and short liquidations accounting for $115.80k and $128.01k, respectively.
Past short liquidations signal heightened volatility as BTC nears a $70k surge
Bitcoin has a past filled with examples of massive short liquidations occurring during previous market upswings when sudden price surges lead to the liquidation of billions of short positions, wiping them out in just hours.
For instance, short sellers lost more than $6 billion trying to bet against publicly traded crypto firms over the first 11 months of 2023 as Bitcoin rallied 130% to $37,800 over the same time. This is according to research firm S3 Partners.
This kind of scenario usually heightens market volatility. It also opens up opportunities for both long-term holders and traders who are betting on the uptrend.
BTC price has topped at $65,000 after the world’s largest asset manager, BlackRock, gave the green light for a new Bitcoin game-changer, and Federal Reserve chair Jerome Powell issued a “radical” bombshell. Market participants are watching closely to see if a further surge to $70k will trigger liquidations and drive prices further up.
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