Bitcoin traders face $26m in liquidations as BTC is back to $20k

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Bitcoin
Bitcoin traders face $26m in liquidations as BTC is back to $20k

The bitcoin (BTC) futures and perpetual markets recorded total liquidations to the tune of $26 million in the past 24 hours amid market uncertainties triggered by the asset’s recent rally, as it faces fierce rejection at the $21,000 zone. 

Shorts represent 64% of total liquidated positions 

Among the liquidated positions, shorts account for a whopping 64%, with $16.8 million worth of assets wiped out in the past 24 hours across all mainstream exchanges. This is possibly due to a resurgence of bearish sentiments within the derivative’s scene, as investors anticipate a bitcoin price correction following the two-month high of $21,200 on Jan. 14.

Bitcoin traders face $26m in liquidations as BTC is back to $20k - 1
BTC/USD chart. Source: CoinMarketCap

These investors have entered short positions in this regard. The CryptoQuant BTC Taker Buy Sell Ratio also indicates this trend of rising bearish sentiments. With a current value of 0.97, the metric suggests a dominance of selling sentiments within the market. Data from Coinglass further reveals a 50.27% dominance of shorts in the past 24 hours.

Moreover, these short positions have re-emerged despite a massive wave of previous liquidations after the asset rallied above $19,500. Over $141 million in bitcoin shorts were liquidated in the 24 hours leading to Jan. 14 across several exchanges, including OKX, Binance, ByBit and BitMex. 

BTC holds steady above $20.8k

Meanwhile, despite the bets against it, BTC has managed to hold above the $20.8k price point, currently changing hands at $20,848 as of press time. The asset retained a 20.96% gain in the past week despite closing yesterday with a 0.40% loss following a 7-day winning streak.

After conquering the first crucial resistance at $21,103 early this morning, BTC met a rejection that brought it below the pivot at $20,834, threatening a dip to its support levels. Notwithstanding, the asset quickly staged a comeback, intending to retest the first resistance point. Bitcoin’s second crucial resistance level sits at $21,323.

However, some market watchers warn of a looming correction that could see BTC retest lows below the $20k level before it surges to new highs. Notably, Il Capo of Crypto believes the asset could still see new lows before the bear market reaches its terminus.

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Wahid Pessarlay

Wahid is an experienced writer, interested in everything decentralized since 2019. Before joining Crypto.News, he wrote for some of the top DeFi and CeFi outlets, bringing in millions of views and educating readers with his knowledge of the industry.