Bitcoin Surge Above $85,000 Could Trigger $1.287 Billion Short Liquidations

According to data from Coinglass, if Bitcoin's price surges above $85,000, the cumulative short liquidation pressure on mainstream centralized exchanges (CEX) will reach $1.287 billion. This significant figure highlights the potential market impact if Bitcoin were to breach this threshold, as it would trigger a substantial number of short positions to be liquidated.

Conversely, if Bitcoin's price drops below $82,000, the cumulative long liquidation pressure on mainstream CEX will amount to $0.287 billion. This indicates that a price decline to this level would result in a considerable number of long positions being liquidated, adding to the market volatility.

The liquidation chart, as noted, does not provide the exact number of contracts awaiting liquidation or the precise value of contracts being liquidated. Instead, the bars on the chart represent the relative importance of each liquidation cluster compared to neighboring clusters, indicating the strength of liquidation at specific price points.

This means that the liquidation chart illustrates the potential impact on an asset's price as it reaches certain levels. A higher "liquidation bar" suggests that reaching that price point will cause a stronger reaction due to a liquidity cascade, where a large number of positions are liquidated simultaneously, leading to increased market volatility.