Bitcoin’s recent price surge above $29,000 has led to significant liquidations in the cryptocurrency market, resulting in traders’ positions being closed and the loss of approximately $130 million. This increased volatility could potentially create a domino effect, causing further liquidations and exacerbating price movements. The community is closely watching Bitcoin’s performance, as breaking through the local high could signal an extended bullish run.
Low Funding Rates and Bitcoin’s Price Movements
Centralized exchanges have relatively low funding rates, suggesting that the current rally may not be fueled by leverage. This could be a positive factor for Bitcoin’s price movement, as a rally not driven by leveraged positions can be considered more stable. However, low funding rates might also imply that there is a lack of confidence among traders, hindering Bitcoin’s ability to maintain its upward momentum.
The king crypto has rallied over 17% in the past two weeks, displaying resilience amid regulatory headwinds and suggesting that the asset could be in the early stages of a strong and long bull run. However, the price briefly crossed $29,000 on Thursday before retracting to trade around $28,500, and major tokens such as Ethereum (ETH) and XRP fell a little over the past 24 hours, pausing what has been a multi-day rally.
Traders and Whales Taking Profits
Amidst it all, on-chain data suggests that some traders and whales are taking profits after weeks of gains, which may fuel a decline in the coming days. CryptoQuant’s Short-Term Output Profit Ratio tool has spiked above 1 in the past week, indicating that investors were probably selling token holdings at a profit. Data tracking whale wallets showed that over 320,000 BTCs were moved or spent by whales in the past week.
Despite the short-term declines, the top crypto remains “well inside a bull market,” according to CryptoQuant. This suggests that any short-term decline is not indicative of a widespread drop. Bitcoin was worth $28,677 at press time.
Source: https://coinpedia.org/bitcoin/bitcoins-rally-above-29000-triggers-liquidation-of-130-million-worth-of-short-positions/