Bitcoin Holds Range Despite 10% Long Liquidation Surge

Bitcoin’s price has shown a narrow range of movement over the past week, contrasting with significant developments in the futures market. According to Axel Adler Jr., an analyst at on-chain analytics platform CryptoQuant, a sharp rise in the long liquidation dominance metric could signal a major shift in market sentiment, potentially washing out bears from the market. Adler shared this data in a recent post, highlighting previous instances where similar conditions led to significant market movements.

The dominance of long liquidations has surged from 0% to +10% over the past seven days, typically indicating distress among bullish traders. However, what sets the current situation apart is the absence of a steep price crash in Bitcoin. Despite facing increasing pressure from long-side liquidations, Bitcoin has largely held within the $103,000 to $106,000 range until a recent drop. Adler explained that this sustained liquidation of long positions without a full-blown price collapse suggests strong buyer support. Data from CryptoQuant shows that BTC’s long liquidations hit 2,200 BTC, the highest in the past week. Usually, a surge in long liquidations indicates that traders anticipating a price rally are being forced out of their positions under pressure.

The CryptoQuant chart shows that spikes in long liquidation dominance, especially in the 15% to 20% range, have historically preceded bullish reversals. Adler noted that if this metric rises by another 5–7%, it could create a high-probability scenario where bearish positions are washed out, flipping Bitcoin’s price movements in favor of the bulls.

Data from Santiment, another on-chain analytics platform, reveals an interesting dynamic among Bitcoin holders. Over the past ten days, wallets holding over 10 BTC have increased by 231 addresses, a 0.15% rise. Conversely, smaller retail wallets containing between 0.001 and 10 BTC have dropped by 37,465 in the same period. This trend indicates a divergence in sentiment between large holders and retail investors. Santiment suggests that the shift where whales and sharks accumulate while retail exits is a bullish combination for Bitcoin. With Bitcoin’s market value hovering just below $104,000 during this accumulation phase, there could be an eventual upward breakout once retail holders begin to reenter.

Despite the underlying on-chain strength, Bitcoin’s spot price has taken a short-term hit in the past 48 hours. During this timeframe, Bitcoin’s price has slipped below support levels between $106,000 and $103,000. At the time of writing, Bitcoin is trading at $102,670, down by 2.6% in the past 24 hours. The decline can be largely attributed to recent U.S. strikes on Iran. The U.S. military strikes on Iranian nuclear facilities caused immediate risk aversion across markets. Bitcoin fell 3.2% after announcements of the strikes, much like its 6% drop during similar 2020 Iran tensions.