The cryptocurrency market is struggling to gain momentum due to the constant pressure on Bitcoin and altcoins. While BTC and altcoins have experienced sharp declines in the past week, one analyst noted that the BTC price is just above critical liquidation zones where billions of dollars worth of leveraged positions have accumulated.
Bitcoin Liquidation Threat!
Liquidation data shared by Joao Wedson, CEO of cryptocurrency analytics company Alphractal, reveals that long positions are significantly gaining weight in the market and that sharp downward movements in the BTC price could trigger on-chain liquidations.
According to Alphractal’s liquidation level data, long positions account for 622% of total positions at risk, while short positions account for 38%. Accordingly, $36 billion in long positions and $22.5 billion in short positions carry liquidation risk.
This distribution indicates a higher concentration of bullish leveraged trades in the Bitcoin market and suggests that the market generally expects an uptrend. According to Wedson, the clusters of liquidation accumulating just below the current price suggest that selling pressure could rapidly increase in the event of a pullback.
The $72,500 Level is Critically Important!
According to data shared by Wedson, there are three key liquidation zones located just below the Bitcoin price.
“Approximately $1.1 billion in liquidation risk at the $73,427 level
• Approximately $1 billion in liquidation risk at the $72,713 level
• Approximately $1.1 billion in liquidation risk at the $72,475 level
A strong break, particularly below the $72,500 level, could trigger a chain reaction leading to the liquidation of over $1 billion in long positions.
Short Positions Are Accumulating at a Further Distance!
In contrast, the first significant clusters of short liquidation in Bitcoin are concentrated in the $83,400-$85,100 range. According to Wedosn, the fact that these levels are approximately 12-15 percent away from the current price indicates that liquidation pressure is more intense on the downside in the short term.
However, liquidation maps do not definitively determine the future direction of price. This data only reveals the levels at which leveraged positions are at risk. At this point, Wedson notes that whether Bitcoin can maintain the $72,500 support level and the price movements in the upward resistance zones will be closely monitored in terms of its future direction.
