Since the approval of Bitcoin spot ETFs in the U.S. in early 2024, Bitcoin (BTC) has rallied strongly, punishing bearish traders in the process. Altcoins have moved in the opposite direction, dealing a harsh blow to bullish investors hoping for an imminent “altseason.”
A recent analysis on CryptoQuant highlights the contrast in liquidation patterns between BTC and altcoins since the approval of spot Bitcoin ETFs, offering a glimpse into the diverging paths taken by the two market segments.
Short liquidations on Bitcoin have far exceeded long liquidations since the ETF approval, according to the report.
Bitcoin’s post-ETF rally crushes the bears
On Binance, Bitcoin’s Cumulative Liquidation Delta (CLD) showed that short liquidations on Bitcoin exceeded long liquidations by far since the SEC approved ETFs in early 2024. In essence, traders who bet against Bitcoin since then have been systematically forced out of their positions as BTC steadily climbed.
In a post on X, analyst Joao Wedson, the author of the CryptoQuant report, stated, “The data doesn’t lie: since the ETF launch, there has been $190 million more in short liquidations than long liquidations on Binance.”
According to Wedson, Bitcoin’s price strength during this period caught many bearish speculators off guard. Rather than correcting or stalling after the ETF launches, BTC has extended its rally, reinforcing its dominance and trust among institutional and retail investors alike.
Altcoins have become a trap for bulls
Unlike Bitcoin, the story is starkly different for the altcoin market. While Bitcoin has steadily climbed and squeezed shorts, altcoins have suffered from overwhelming long liquidations.
According to CryptoQuant’s data, long liquidations in the altcoin market outpaced short liquidations by nearly $1 billion during the same post-ETF period.
This imbalance suggests that many traders expected altcoins to follow Bitcoin’s bullish lead, perhaps anticipating the onset of a long-awaited “altseason”—a period in which altcoins outperform BTC.
Unfortunately for these traders, altcoin prices largely trended downward, defying the bullish bias and resulting in widespread liquidations of leveraged long positions.
Market dynamics reveal a diverging risk appetite
This stark difference in liquidation patterns reveals more than just market volatility; it suggests a fundamental shift in trader sentiment and risk behavior. While investors showed correct bullish conviction in Bitcoin, they incorrectly assumed altcoins would follow suit.
The result? BTC punished the bears, but altcoins punished their bulls even harder.
The divergence also reflects institutional interest. Spot Bitcoin ETFs have attracted billions in capital from traditional finance players, buoyed by strong macroeconomic narratives, adding legitimacy and demand to BTC.
Altcoins, however, lack similar instruments and regulatory clarity, leaving them more vulnerable to retail speculation and volatility.
For traders and analysts, the message is clear, and it’s that the current crypto environment favors Bitcoin in terms of relative stability and upside potential.
Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More
