Bitcoin longs speculated to have been leveraged more than shorts
Bitcoin’s market movements have been closely scrutinized by the entire community, with many speculating the movement of the world’s largest cryptocurrency to be a sign for the rest of the market as well.
A new analysis by Skew Markets showed that there were many minor liquidations during Bitcoin’s most recent surge over $1000, which the organization claimed as “another data point on shorts being less leverage than longs.”
One cryptocurrency enthusiast, @ShrimpFi, speculated,
“One reason is because it is collateralized with bitcoin?
Example: A -33% move to liquidate a 2x long position, but a +99% move to liquidate a 2x short position. Both are 2x.”
According to the analysis, the buy liquidations for Bitcoin clocked in at an average of $173,000, while it peaked at $6 million. The total buy liquidations amounted to $117.5 million. At the same time, the sell liquidations maxed out at $10 million, while it held an average of $342,000. The sell liquidation metric was much higher than that of the buy liquidation metric, staying at $326.3 million.
The graph reflected that sell liquidations on an hourly basis almost hit the $50 million mark, closing at approximately $45 million. Some other members in the community pointed out the relevance of the metric, with @hasufl, a Twitter user, stating,
“Important data point that there is fundamental, non-speculative demand for the short side of the perpetual swap, e.g. to hedge inventory or create synthetic cash.”
Bitcoin shorts were in the news recently after Bitcoin’s last surge over $10k resulted in shorts worth $64.38 million getting liquidated. Many speculated that BitMEX’s leverage offer of 100x was one of the reasons for the market fatality.
At press time, Bitcoin was enjoying a 4.3 percent uptrend, resulting in the cryptocurrency trading at $10,517. BTC held a total market cap of $187.48 billion, with a 24-hour market volume of $25.19 billion.
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