Bitcoin Surge Above $87,000 Could Trigger $6.09 Billion Short Liquidation

Bitcoin's price movements have significant implications for the liquidation pressure on mainstream centralized exchanges (CEX). According to recent data, if Bitcoin's price surges above $87,000, the cumulative short liquidation pressure on these exchanges will reach $6.09 billion. This figure highlights the substantial risk that short positions face in the event of a price breakout.

Conversely, if Bitcoin's price drops below $83,000, the cumulative long liquidation pressure on mainstream CEXs will amount to $7.20 billion. This indicates that long positions are also at considerable risk if the price falls below this threshold. The liquidation chart, which displays the intensity of liquidation clusters, does not provide the exact number of contracts awaiting liquidation or the precise value of contracts being liquidated. Instead, it illustrates the relative importance of each liquidation cluster compared to its neighbors, reflecting the intensity of liquidation at specific price levels.

The liquidation chart serves as a visual representation of how the price of the underlying asset will be affected when it reaches certain levels. Higher "liquidation bars" on the chart signify that when the price reaches that level, a more intense reaction will occur due to a liquidity cascade. This information is crucial for traders and investors as it provides insights into potential market movements and the associated risks.