In a 4-hour period, Bitcoin traders experienced $29.22 million in long futures liquidations. This is another significant number of liquidations triggered by similar price action as on June 1.
On the night of June 6-7, the BTC price collapsed and traders lost nearly $30 million due to the liquidation of long positions. The liquidation peak was a short 4-hour period in which the Bitcoin price fell from the $31,300 area to $29,300.
This is the largest short-term liquidation of long positions since June 1. Then, as a result of similar declines in the BTC price, traders lost a total of $87.97 million over a 12-hour period (blue circle). In contrast, previously large short-term liquidations occurred on May 26, when more than $40 million in long positions were lost in 4 hours (red circle).
However, today’s liquidations, despite running into the tens of millions of dollars, are still small compared to the losses in the first half of May 2022. On a long-term chart going back to March 2022, we can see that the peak of long liquidations occurred between May 9-12. At that time, traders collectively lost a record $635 million in 4 days.
BTC price in the context of long liquidations
The record level of long futures liquidations was caused by the fall of Bitcoin from the long-term support area of around $34,500 to the bottom at $26,700 between May 9 and 12. In turn, the current declines are the result of the consolidation of the largest cryptocurrency in the range of $28,600-$31,800, which has been in place since May 13 (black lines).
Also, worth noting are the two fakeouts that ended up returning to the range (blue circles). Moreover, the consolidation is taking place with weakening trading volume (blue line).
Therefore, a resolution of the range can be expected around mid-June. Two possible scenarios are a bearish retest of the resistance area at $34,500 or a continuation of declines to retest the May 12 low.
For Be[in]Crypto’s latest Bitcoin (BTC) analysis, click here.