Potential Bear Storm Underway, Crypto Liquidations Hit New Highs

The analyst expects a bear storm to follow the recent crypto rally
BTC Price at the time of writing – $20,378.56
The bear storm will happen if price gains are not sustained as liquidations hit a 15-month high

According to a CryptoQuant on-chain analyst, futures market short liquidations data, which is at a 15-month high, suggests that despite rising prices, the cryptocurrency market may be poised for another bear storm.

J.A. Maartunn stated in a QuickTake on the cryptocurrency market intelligence platform that the most recent liquidations data suggests that bulls face a challenging task if the most recent crypto rally is to be sustained.

Crypto market rally still yet to abate

He noted that crypto short positions began to roll over around the time U.S. stock markets opened. A total of about $320 million in short liquidations were recorded on the day, making it a significant trading day.

He added that because of this, it’s critical for bulls to maintain the Bitcoin (BTC) price above $20,000 and turn the price level into support. This is especially true given the upcoming monthly close.

The main concern right now is: Will bulls be able to maintain prices above the $20000 level and use it as support? Given that the monthly close will be in a few days, it will be very important,” the analyst stated.

Prices in the cryptocurrency market have continued to rise despite the analyst’s prediction of a bear market if the current rally is not sustained. Over $1 trillion has been added to the market’s capitalization once more.

Ether (ETH), like Bitcoin (BTC), has also been rising, contributing to the massive short sales. According to earlier reports from U.Today, ETH surged significantly to an intraday high of $1,512, evicting short positions worth more than $105 million.

ALSO READ: IRS Expands Key US Tax Language

How many Bitcoins are out there?

The software of Bitcoin limits the total supply to 21,000,000 coins at any given time. Mining is the process of creating new coins. Miners collect transactions as they traverse the network and package them into blocks protected by complex cryptographic calculations.

At the time of Bitcoin’s launch, the reward for each block was fifty bitcoins. This number is reduced by half for every 210,000 new blocks mined, which takes the network approximately four years. By 2020, the block reward will be 6.25 bitcoins, down half three times.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing