Quick Take

Bitcoin’s recent performance has been nothing short of a rollercoaster ride of late, highlighting the resurgence of the volatile nature of the crypto market. In a span of approximately nine days since Nov. 9, Bitcoin’s price embarked on a tumultuous journey, peaking just shy of $38,000 and plunging to depths as low as $34,500.

However, this erratic price action masks a deeper reality – the role of liquidations in dictating these price swings. In this period, the market witnessed substantial liquidations, amounting to $726 million in short liquidations and over $1 billion in long liquidations. Such statistics underline the heavy influence of leveraged positions in these market dynamics.

This influx of liquidations, both short and long, signals that sizeable leverage has been eradicated from the market. As such, the recent dramatic price oscillations are not merely random fluctuations but a manifestation of a significant amount of leverage being wiped out. This purge of leverage could indicate a potential reset in the market, paving the way for more stable movements in the future.

Date Short Liquidations ($M) Long Liquidations ($M)
Nov. 9 273 218
Nov. 10 79 70
Nov. 11 57 84
Nov. 12 44 70
Nov. 13 59 118
Nov. 14 40 292
Nov. 15 108 32
Nov. 16 54 168
Nov. 17 12 11
Total 726 1,063

Source: Coinglass


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