$41.5 million worth of leveraged long positions were liquidated in the bitcoin (BTC) futures market on Monday, according to CoinGlass.com, the second largest daily long liquidation so far this month.
The surge in long liquidations came as bitcoin fell nearly 3.5% to a one-month low of $29,000.
BTC spot price was last held above $29,000 as crypto investors/traders booked profits after impressive performance this year amid lack of fresh positive catalysts to extend further gains in the bitcoin market.
Caution ahead of this week’s US Federal Reserve policy announcement (on Wednesday) and US core PCE inflation (on Friday) could also play a role in the decline, as well as fresh negative headlines related to the world’s largest cryptocurrency exchange, Binance.
According to CoinGlass.com’s bitcoin exchange liquidation map, another wave of long positions will be liquidated if bitcoin breaks below $28,500.
According to a CoinGlass.com graphic, leveraged long bitcoin positions worth about $500 million are at risk of being liquidated before BTC reaches $28,400.
But bears shouldn’t get too excited, as if bitcoin were to suddenly rise back to the mid-$29,000s, it could trigger a short-squeeze, putting more than $600 million worth of leveraged short-positions at risk of being liquidated if the BTC price rises back to $29,600.
Here’s Where Bitcoin (BTC) Could Be Headed Next
Despite bitcoin’s decline on Monday, investors remain optimistic about the near-term trajectory of the cryptocurrency.
At least, that’s what it looks like to see how the bitcoin options markets are priced.
According to data presented by The Block, the 25% delta skew of bitcoin options expiring in seven days was approximately 1.25, which suggests that investors are still paying a premium for bullish call options expiring in seven days compared to their corresponding bearish put option counterparts.
Meanwhile, the delta skew of 25% of options expiring in 30, 60, 90 and 180 days is sitting even higher, between 2 and 6, suggesting that options investors are confident that bitcoin’s near-term trajectory remains largely upward.
This outlook matches well with the technical outlook for bitcoin, which remains broadly positive.
While BTC price is at risk of a slip below the 50-day EMA this week just above $29,000, which would open the door to testing support in the $28,500 area as late May highs and the 100DMA, bitcoin is approaching a strong long-term resistance level.
This is a bullish trend that began in late 2022 and has consistently supported price action so far this year.
This week’s Fed meeting is unlikely to push too hard against bets that this week’s hike will be the last of the central bank’s cycle, and with bitcoin still benefiting from a tailwind of increased institutional interest in the wake of Wall Street heavyweights’ spot bitcoin ETF applications last month, the argument for a breakout to the bottom of this year’s uptrend isn’t yet very strong.
Disclaimer: Crypto is a high risk asset class. This article is provided for informational purposes and does not constitute investment advice. You can lose all your capital.