$BTC
Let me give you an example involving $BTC Suppose one trader opens a long position at $108,000, while another opens a short position at the same price of $108,000. The liquidation price for the long is $106,000, and for the short it's $110,000.
Now, in a bullish market, where the price trend is upward, the price rises to $108,800 and the long trader decides to exit and take profits. Since the market is bullish, the price continues to climb toward $110,000. Why? Because there’s no significant resistance below, and the primary “pressure” is on the short traders — not from opposing sell orders, but from their own liquidation or stop-loss levels.
Once the price reaches those levels (around $110,000), short positions start getting liquidated. That liquidation triggers buy orders to cover the shorts, which further fuels the upward momentum. A portion of the liquidated funds goes to the long traders (like the one who exited at $108,800), while the rest is taken by the exchange.
So in this scenario, I exited early at $108,800, but the price continued rising due to this liquidation chain reaction.
The takeaway is: in a bullish trend, repeatedly entering short positions without proper timing is very risky. Those shorts are likely to get wiped out before the price even begins to reverse toward a bearish target.
