$380M in crypto liquidations – What’s behind the market shake-up?

Key Takeaways

Why was there an increase in crypto liquidations in the past 24 hours?

The bullish impetus on the 9th and the 10th of November led some traders to enter long positions, anticipating a continued uptrend, but the rally soon lost steam and reversed.

Where will the crypto markets go next?

Since most of them follow Bitcoin, and BTC was trading within a range, traders could expect short-term volatility and muted bullishness.

On the 11th of November, Bitcoin [BTC] retraced back to the $104.7k level. This price dip erased the small gains and short-term bullish momentum BTC set up on the previous day.

While the price did not really go anywhere new in the past 24 hours, market participants thought it would, and positioned accordingly.

For their pains, some of them faced liquidations. CoinGlass data showed $379.9 million in liquidations in the past 24 hours. Bitcoin faced $81.43 million in liquidations, while Ethereum [ETH] witnessed $71.94 million worth of positions forcibly closed.

Bitcoin’s liquidations were split nearly evenly between long and short positions, at $41.75 million and $39.68 million, respectively. Ethereum was slightly more lopsided, with $43.45 million long positions facing the axe.

Interestingly, ZCash [ZEC] was one of the assets with the largest volume of liquidations, measuring $31.24 million. Of that, $26.66 million was positioned bullishly.

Why did the crypto liquidations increase in the past 48 hours?

Source: BTC/USDT on TradingView

On the 9th of November, Bitcoin surged from $101.6K to $106.6K by early the next morning.

The 1-hour chart revealed a spike in buying volume, while moving averages confirmed a shift toward bullish momentum.

Despite positive news on the 10th of November and strong S&P 500 futures suggesting further upside, BTC failed to extend its rally. Instead, the 1-hour chart revealed a range-bound pattern that has persisted for the past 36 hours.

This range reached from $104.7k to $107.1k. Until this short-term range is breached, traders can monitor the range extremes and be wary of betting on a breakout prematurely.

Source: CoinGlass

Since Bitcoin tends to lead the crypto market and also tends to attract the most amount of capital, charting its price moves could help BTC and altcoin traders prepare for the next move.

The 3-day liquidation heatmap above showed that there was a juicy pocket of liquidity underneath current prices. The $103.8k-$104.4k was a magnetic zone, and a stronger zone at $100.7k-$102.4k was also seen.

Given the range formation, it is likely we see a BTC dip to $103.8k followed by a move toward the overhead liquidity cluster at $107.5k.

Traders should beware of trying to catch a breakout and trying to time the next trend early.