BTC futures Open Interest has built up to levels where significant price fluctuations can lead to long or short liquidations cascade, according to CryptoQuant
Bitcoin (BTC) derivatives market may be poised for a liquidation cascade, according to open interest (OI) data crypto quant, The analysis indicates that long or short futures traders may be in some pain if the BTC price breaks out significantly from current levels.
The blockchain and crypto market intelligence platform highlights that the concern stems from the fact that OI has been rising since BTC reached its (approximate) $17,500 bottom in June. Since then, the price of Bitcoin has been trading in a range — between a high of around $22,000 to a low of $18,000 — which has not allowed massive liquidations to occur.
There have only been three significant hourly liquidation wipeouts, one of which occurred on the same day that $5.8 million worth of BTC short liquidations were recorded. However, this may change if the price breaks out of this range. The analyst wrote:
The price has been ranging too much lately for these large liquidations to occur. This is something to keep an eye on. With OI building up, there is potential for a liquidation cascade (on either shorts or longs) if price deviates far enough from this range.
BTC futures remain stable
At present, there is no sharp jump in liquidation in the futures market. per data coinglassA modest 19,780 traders lost approximately $47 million in liquidations in the last 24 hours. especially, Last Mass Liquidation Waterfall The fall in prices was caused by market movements of short-term holders on the market.
Observers including Charles Hoskinson are hopeful that the Bitcoin market will ultimately mature and outgrow wild swings in price as the Bitcoin blockchain gains more adoption.
