Bitcoin's Price Drop Could Trigger $66M Long Liquidation

Bitcoin's price has been volatile in recent weeks, with significant implications for the liquidation of long positions on mainstream centralized exchanges (CEX). According to data from Coinglass, if Bitcoin's price drops below $81,000, the cumulative long liquidation volume on mainstream CEX will reach 66.77 million.

On the other hand, if Bitcoin's price surpasses $85,000, the cumulative short liquidation volume on mainstream CEX will reach 105 million. It is essential to note that the liquidation chart does not display the exact number of contracts to be liquidated or the exact value of contracts being liquidated. Instead, the bars on the liquidation chart show the importance of each liquidation cluster relative to neighboring liquidation clusters, i.e., intensity.

The liquidation chart indicates the extent to which the price of the underlying asset will be affected when it reaches a certain level. A higher "liquidation bar" suggests that the price, when reached, will have a more intense reaction due to a liquidity cascade. This information is crucial for traders and investors to make informed decisions about their positions in the volatile cryptocurrency market.