Bitcoin Triggers Over $110 Million in Liquidations After Bullish Breakout
Bitcoin’s (BTC) recent surge in price to near $40,000 has resulted in significant losses for short sellers, exceeding $100 million over the past 24 hours. However, despite the cryptocurrency market enjoying a green run, these gains have not translated into wrapped Bitcoin (wBTC) on Ethereum.
The recent crypto market upswing caught several market participants off-guard, with traders enduring over $140 million of liquidations. Short sellers alone bore the brunt of over $110 million in losses, marking the second-largest amount of short liquidations in any day since mid-November.
Bitcoin traders faced significant liquidations totaling $36 million, while Ethereum traders experienced liquidations amounting to about $32 million. Furthermore, Solana traders encountered over $6 million in liquidations as the price of SOL briefly surged beyond $65, marking its highest price point since May 2022.
Crypto exchange Binance recorded the most losses among its counterparts at $53.44 million, followed by OKX at $51 million.
The liquidations occurred as Bitcoin continued its year-long rally. Technical analyst Koroush AK said Bitcoin has found new resistance at $40,000 and built strong support around $38,000, hinting at a potential altseason on the horizon.
Wrapped Bitcoin (wBTC) supply on Ethereum decreased by around 2% or more than 3,000 BTC in November. This indicates that demand for BTC on the ETH blockchain has remained muted despite the flagship asset’s rising value.
Tom Wan, a research analyst with 21co, explained that the balance decline could be linked to decreased DeFi appetite and the emergence of BRC-20 on the blockchain network. At the peak of its supply, demand for wBTC was relatively high as investors found a use for it in their DeFi activities. However, with several DeFi protocols struggling to reach previous heights, demand for wBTC has waned.
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Historically, Bitcoin has been known for its notorious price volatility. Over the years, the cryptocurrency has experienced significant price fluctuations, making it a high-risk investment. Despite these risks, Bitcoin has continued to garner attention as a potential hedge against fiat currencies and traditional financial systems.
Please note that the information provided in this article is for informational purposes only and should not be considered as financial advice. Readers are encouraged to conduct their own research and seek the guidance of a professional financial advisor before making any investment decisions.
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