5 months ago 1 min read

Despite $861 Million in Cryptocurrency Liquidations, Large Short Positions Drive Bitcoin Toward $17,000


The second-largest short of the year has helped push Bitcoin up above $17,000. On November 8, prices fell drastically across the board as a result of the chaos in the cryptocurrency markets brought on by the FTX exchange's uncertain future. A volume of short positions were opened as a result of capitalizing on the circumstance, at a rate unseen since the Terra Luna collapse in May.

Source: Glassnode

Exchanges now set a negative average funding rate (in%) for perpetual futures contracts. Long positions occasionally pay short ones when the rate is positive. When the rate is negative, on the other hand, short holdings occasionally compensate long ones. Although the financing rate has surged below the neutral line, it is still near to the level reached in May. The rate is far lower than the negative financing rate that was observed during the COVID-19 crash in March 2020, though.

Source: Glassnode

Traders frequently short BTC aggressively every time it reaches a capitulation low. In the short term, these levels often indicate a fresh bottom. Similar events occurred during the Terra Luna collapse, the COVID-19 accident, the mining ban in China in 2021, and now the imminent failure of FTX.

According to data obtained from Coinglass, there have been $861 million in cryptocurrency liquidations over the last 24 hours, with $250 million consisting of Bitcoin shorts. At the time of publication, Bitcoin was trading at $17,453, a 15% decrease over the previous 48 hours.

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