Bitcoin's Price Volatility: $89K or $91K Could Trigger Massive Liquidations
1min read Bitcoin's price has been volatile in recent weeks, with significant implications for the liquidation strength of major centralized exchanges (CEXs). According to data from coinglass, if Bitcoin falls below $89,000, the cumulative long liquidation strength of major CEXs will reach 394 million. This means that a substantial number of long positions held by traders on these platforms could be liquidated, potentially leading to a cascade of selling pressure.
Conversely, if Bitcoin breaks above $91,000, the cumulative short liquidation strength of major CEXs will reach 9258.7 million. This suggests that a significant number of short positions could be liquidated, potentially leading to a buying frenzy and further driving up the price of Bitcoin.
It is important to note that the liquidation chart provided by Coinglass does not show the exact number of contracts to be liquidated or the exact value of contracts to be liquidated. Instead, the bars on the liquidation chart represent the importance of each liquidation cluster relative to neighboring liquidation clusters, that is, intensity. Therefore, the liquidation chart shows to what extent the price of the underlying asset will be affected when it reaches a certain level. A higher "liquidation bar" indicates that the price will experience a more intense reaction due to a liquidity cascade when it reaches that level.
In the event of a significant liquidation, the price of Bitcoin could experience a sharp move in either direction, depending on the prevailing market sentiment and the balance between long and short positions. Traders should be aware of the potential risks and opportunities that these liquidation events may present and adjust their strategies accordingly.
