On February 18th, COINOTAG reported critical data from Coinglass concerning Bitcoin’s price volatility. Should Bitcoin dip below $94,000, the cumulative long liquidations on major centralized exchanges (CEX) could skyrocket to $1.371 billion. In contrast, if Bitcoin exceeds $97,000, short positions may face a cumulative liquidation of approximately $762 million. This information underscores the potential triggers for significant market movements.
The liquidation chart serves as a crucial analytical tool, highlighting the relative intensity of liquefactions rather than detailing precise contract values or counts. Each bar on the chart represents the impact of liquidations on adjacent clusters, implying that higher bars correlate with an increased likelihood of price drops or rallies as large liquidations occur.
Market participants should be cautious, as these liquidation thresholds could catalyze a liquidity cascade, leading to pronounced volatility in Bitcoin’s price dynamics. Understanding these metrics is essential for effective risk management and trading strategies in the evolving cryptocurrency landscape.