Long and short game, with 5.5 billion longs waiting to be liquidated below
The liquidation map shows that if BTC breaks through 110,000 USD, the cumulative liquidation intensity of short positions on major CEXs will reach 1.518 billion USD. Conversely, if Bitcoin falls below 100,700 USD, the cumulative liquidation intensity of long positions on major CEXs will reach 5.546 billion USD. (The liquidation intensity of long positions is 3.65 times that of short positions.) This could lead to a 'short squeeze' effect, where the behavior of short covering further drives up prices, creating a positive feedback loop.
If the price falls below 100,700 USD, the liquidation pressure of 5.546 billion USD in long positions indicates that there is a dense concentration of leveraged long positions below. Once the key support is broken, liquidity exhaustion may trigger a 'long liquidation' sell-off, exacerbating short-term downside risks.
The current decline is primarily due to the risk-averse behavior of Asian investors. It is unclear how this will transmit to the main trading hours in the U.S., but historical data shows that the impact of a downgrade in credit ratings on the market is short-term.
The real game starts when the U.S. stock market opens in the evening.
The liquidation map can only serve as a reference; I will announce specific market conditions in my small circle at the first opportunity.
