Be cautious of short selling: Bitcoin rising to this level may trigger a $19.0 billion short squeeze
Over the past few days, the price of Bitcoin has experienced a fairly noticeable rebound, rising from a low of $53,000 last week to over $66,000 in the early hours of Wednesday, and has now fallen back to the current trading price of $64,433.
The bullish price performance led to the closure of about 50,436 traders in the encryption currency market today. In particular, according to the data, this number of traders experienced large-scale liquidation, resulting in a current total liquidation amount of 1.4558 billion US dollars.
Bitcoin traders have borne the brunt of this comprehensive liquidation, with about 46.22 million US dollars evenly split between shorts and longs, indicating that the asset's performance has been mixed in just the past day.
Although recent trading activities have already triggered millions of dollars in liquidation, further data indicates that if Bitcoin continues to rise to a new all-time high and surpasses a significant threshold, this situation may escalate drastically, resulting in billions of dollars in liquidation.
In particular, as reported by MartyParty, a well-known encryption currency enthusiast in the community, the market will be affected if the price of Bitcoin reaches $72,400. At this price point, nearly $19 billion worth of Bitcoin short positions will face liquidation.
Marty Party reported the news on Elon Musk's social media platform X and quoted data. The encryption currency enthusiast summarized the disclosure by pointing out, "Never bet against technology."
Although the price tag of $72,400 seems far off from the current market price, considering the current fundamentals, BTC may not take that long to reach this mark. For example, the market may reach this mark faster due to the liquidity that is driving its current trend.
In addition, there are no signs of a Bear Market in the short term that would hinder the rise of the asset. First of all, according to the data, the German government has sold all of its BTC assets, about 49,858 BTC, and the current balance is below $500.
It is worth noting that the current balance of about $427 BTC is the cumulative donation of Sats (the small unit of BTC) from different wallet Address. In addition, according to the latest data, 36% of Mt. Gox BTC has been allocated to creditors.
However, despite this distribution, the price of BTC has not shown any significant pullback, which indicates two things: creditors have not sold off, and even if they did, the Bitcoin market is quickly absorbing it, as can be seen from the slight stability in BTC price.
The massive sell-offs by the German government and Mt. Gox were once seen as a major threat to the encryption currency market, but now they seem to have little impact, indicating that there are no significant bearish obstacles to prevent Bitcoin from soaring to the $72,400 mark and forming a short squeeze.
(Data Source: Samuel Edyme)
