The Bitcoin derivatives market has set new records while BTC maintained its upward trajectory, surpassing $118,000. The Open Interest (OI) of the coin reached an all-time high, accompanied by over $1.25 billion in liquidations in just one day.
The advance indicates a growing market participation, but it also raises doubts about the sustainability of the current upward trend, especially in light of increasing warnings about possible liquidations in long positions.
According to data from CoinGlass, total liquidations in the market exceeded $1.25 billion in the last 24 hours. Of this amount, approximately $1.12 billion came from short positions. Bitcoin alone accounted for over $656 million in liquidations.
In the last 24 hours, 265,106 traders were liquidated. Total liquidations amount to $1.25 billion, CoinGlass reported.
The scenario points to intense speculative activity, with many traders betting heavily on short-term BTC movements.
Liquidation Heat Map. Source: Coinglass
An evident example is James Wynn, a trader known for using high leverage on the Hyperliquid platform. As pointed out by Lookonchain, his leveraged short position in BTC was fully liquidated in less than 12 hours, resulting in a loss of $27,921.63.
At the same time, Byzantine General, a consultant at Velo, analyzed data from various exchanges and assessed that this could be the largest short squeeze of Bitcoin in recent years.
... This is the largest event of short position liquidations in BTC in years, he stated.
More liquidations may occur with a new record in Open Interest
Liquidations may intensify in the coming days. The Open Interest (OI), an indicator that represents the total value of open futures contracts, has just reached a new all-time high this July.
Currently, the total OI of the crypto market exceeds $177 billion, the highest level ever recorded. Meanwhile, Bitcoin's OI reached $78.6 billion, another record. This shows intense interest from traders in the current market.
Open Interest of the market and Bitcoin. Source: Coinglass
These new records indicate that the market is going through a phase of high sensitivity. The high Open Interest reveals that many traders are operating with significant leverage, making the scenario prone to large-scale liquidations even with small fluctuations in the price of Bitcoin.
Trader sentiment shifts from sell to buy
However, sentiment among investors is also changing. With the appreciation of BTC, there is a growing migration from short to long positions, reflecting the expectation that the upward movement will continue in the coming days.
Bitcoin Exchange Liquidation Map. Source: Coinglass
Moreover, the CoinGlass liquidation heat map indicates that liquidations in long positions (in red, on the left) on major exchanges already surpass liquidations in short positions (in green, on the right). Analyst Joe Consorti warned of the risks associated with this scenario.
... Leverage in long positions now exceeds short positions by a ratio of 10:1 in this range. Caution is essential, Consorti stated.
This shift indicates that the recent rally of Bitcoin and altcoins has led many traders to reassess their projections. However, this growing optimism comes with risks. An unexpected event or a sharp market fluctuation could still lead to significant losses.
The article Liquidations soar with Bitcoin above $118,000 was first seen on BeInCrypto Brasil.
