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The latest round of liquidations affected more than 250,000 traders, erasing over $650M in long positions. One whale trading on HTX got liquidated for $98.46M after Bitcoin (BTC) dipper under $100,000. 

After a relatively docile weekend, the crypto market started the week with price volatility that kicked off a series of liquidations, predominantly affecting the accumulation of long positions. One whale on the HTX centralized exchange got liquidated for $98.46M, the largest single position to fall after Bitcoin’s recent dip under $100,000. 

At the time of publication, 254,486 traders were, with most liquidations affecting long positions. Of the $860.25M liquidations, over $795M were long. The recent series of liquidations may not be over yet, as BTC continued to dip and revisited positions under $98,000. 

Long positions accounted for above 84% of the liquidations on most major exchanges, with over 99% liquidated longs on Bitfinex.

While the recent liquidations may be shocking to some, analysts believe they are the typical crypto liquidity shakedown, which could open the way for a new rally. 

After the liquidations, BTC traded at $98,736.72, quickly bouncing from lows in the $97,000 range. BTC trades under conditions of greed, with the sentiment index remaining at 71 points even after the recent price correction. BTC retained a dominance of 56.2%, ahead of the sliding dominance of Ethereum (ETH) at 10.2%.

The peak activity on derivative markets created a Binance premium, where BTC traded at $99,105.71. This premium was only valid for the FDUSD stablecoin, which is only available on Binance. BTC also had a slight Coinbase premium at $98,864.87 in its direct pairing with the USD. The disparate prices may reveal different trading strategies. 

BTC trading ranges from risky leveraged positions to renewed short-term accumulation. Older whales are slowly selling, while coins are shifting toward newly created wallets, with a growing share of retail holders. However, in the short term, leveraged traders remain the most influential force behind short-term price moves.

More BTC liquidations may be ahead

The liquidation cycle may continue, accelerated by the market reacting to any perceived break in the bullish narrative. The buildup of long or short positions will remain one of the drivers of liquidations and price swings. 

Immediately after the latest price dip under $98,000, BTC traders rebuilt over $58M in long positions at $98,139.02. Bitcoin traded sideways after its initial dip, seeking direction based on leveraged trading. 

BTC still carries short positions starting above $102,000 and all the way to $108,000. The heatmap may change, but some of the positions may be liquidated before the chance to close. 

BTC may also trade with higher volatility in preparation for the January monthly options expiry. About $7.74B in Bitcoin options are set to expire on January 31, with maximum pain at $98,000. 

January’s options expiry may affect trading in the next four days. | Source: Coinglass

The price movements in the coming days may include attempts to sway the price for BTC for the most favorable options outcome. At one point, up to $6B in Bitcoin options were set to expire out of the money. 

January could still end in the green

The recent price volatility raises questions about Bitcoin’s overall performance in January. The month is a mixed bag, depending on the market momentum and the timing of the halving cycle. BTC is still expected to rally to a new all-time high, and has easily recovered over $105,000 several times this month.

However, the weight of the futures market may go against the otherwise optimistic predictions.

In the month to date, Bitcoin still achieved 5.4% gains, above the average of 3.51%. In the last few years, only the 2022 crash led to over 16% loss for the month of January. However, results varied from minimal gains of 0.23% in 2024, to over 39% for 2023. 

The coming week may also feel the effect of lowered activity on the Asian markets, in expectation of the New Year celebrations on January 29. The recent price moves already reveal the lowered activity in the Asian markets.

The opening of the US markets will also show the strength of demand, reflecting the unique economic conditions in the USA. 

BTC is still perceived to be in line with most of its long-term prediction arcs, based on different prediction models. January’s performance year-on-year tracks the Rainbow Chart and the stock-to-flow model. For now, both crowd and smart money sentiment remains neutral, awaiting a signal for a clearer price direction.

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