{"id":482064,"date":"2022-01-26T23:00:35","date_gmt":"2022-01-26T23:00:35","guid":{"rendered":"https:\/\/uniquehot.com\/?p=482064"},"modified":"2024-06-11T14:10:55","modified_gmt":"2024-06-11T14:10:55","slug":"bitcoin-leverage-lack-of-liquidations-could-indicate-another-wave-of-selling","status":"publish","type":"post","link":"https:\/\/uniquehot.com\/news\/bitcoin-leverage-lack-of-liquidations-could-indicate-another-wave-of-selling\/","title":{"rendered":"Bitcoin Leverage: Lack Of Liquidations Could Indicate Another Wave Of Selling"},"content":{"rendered":"
Bitcoin finally broke below the $40K point this past weekend. This had sent the cryptocurrency back towards six-month lows. One thing though was that liquidations or the digital asset remained lower than expected. The current liquidation volumes lay well below the volumes that have accompanied previous crashes like this one. This could be a very important indicator for the market.<\/p>\n
Previously, whenever the price of bitcoin had dumped this hard, liquidation volumes have quickly risen. This is due to the massive sell-offs that follow such crashes as investors try to get out of a bleeding market. This time around, bitcoin liquidation volumes have not jumped. They remain really low, indicating that maybe investors were not done selling their holdings.<\/p>\n
Related Reading |\u00a0Has Bitcoin Reached Its Bottom? Analyst Says It Still Has A Long Way To Go<\/a><\/strong><\/em><\/p>\n If this is the case, then there may be more downside coming as the week runs toward the end. Massive sell-offs have already sent the digital asset to lows not seen since mid-last year. Another round of sell-offs could end up pushing the cryptocurrency\u2019s value down below $30K.<\/p>\n Last Friday, when the price of BTC had successfully broken below $40,000, the bitcoin futures and perpetual markets were rocked by liquidation. By the time the beginning of the weekend rolled around, over $854 million in long liquidations were already recorded. This may seem like a lot but compared to previous iterations of this type of shakeout, liquidations have fallen short.<\/p>\n <\/p>\n May 2021 was the last time that BTC\u2019s price had taken a similar plunge. In total, the market saw $4.8 billion worth of liquidated longs across the market. Indicating that the sell-off in May was more intense than those recorded in January of 2022. One explanation for the low liquidation volumes is that traders were able to re-allocate and add collateral to underwater trades, given that they\u2019ve had more time to reassess their positions.<\/p>\n Another reason for the low liquidation volumes could be the data available for analysis. Back in May 2021, crypto exchanges like Binance and ByBit had their bitcoin liquidation data out for anyone who wanted to have a look. Since then, there has been a change by both exchanges where they now restrict their liquidation. Now, analysts are having to guesstimate liquidation volumes using historical data from the exchanges.<\/p>\n <\/p>\n Binance still retains dominance of the market, thus, not having access to the crypto exchange\u2019s bitcoin liquidation data could severely affect the volumes of liquidations being reported. The crypto exchange\u2019s dominance in the market has risen since before its data was restricted, suggesting an even larger pool of liquidations that are not being reported correctly.<\/p>\nBTC liquidation volumes fall short of expectations | Source: Arcane Research<\/a><\/pre>\n
Where Are The Liquidations Happening?<\/h2>\n
BTC price begins uptrend | Source: BTCUSD on TradingView.com<\/a><\/pre>\n