Bitcoin liquidity trap: $1.6 billion liquidated in 24 hours

On the Bitcoin market, $1.6 billion was liquidated in one day, of which $866 million in long positions and $797 million in short positions. An analyst warns that the market will not go straight up and that there is considerable liquidity waiting to be picked up below the current price.

Bitcoin is available at OKX and Bybit.

In brief:

• In 24 hours, $1.6 billion was liquidated, including $866 million in longs and $797 million in shorts.
• A Bitcoin heatmap shows large liquidity clusters below the current price.
• An analyst expects the market to seek out that liquidity first before a further rise is possible.

Liquidity pulls the market down

The Bitcoin heatmap over the past week clearly shows where large concentrations of liquidity are located. A noticeable amount of liquidity is visible around the levels of $63.000 to $69.000, which means there are many open orders and positions in that area.

Analyst Darkfost points out that markets tend to move towards zones where there is a lot of liquidity. With the current accumulation below the market price, he considers it likely that the price will first decline before any further rise takes place.

Volatility returns to the market

The liquidations on both sides of the market, both longs and shorts, point to increased volatility. This is striking because both bullish and bearish speculators are hit within a short period of time. Darkfost states that this volatility was expected.

Earlier, we already reported on the large short positions that would be in danger if the price rose towards $80.000. The recent wave of liquidations shows that this pressure is now being felt on both sides. Investors betting on an immediate upward breakout therefore run a considerable risk.