The data show that Bitcoin short liquidations have notably exceeded long recently. Here's if it's something alarming or not.
The Bitcoin liquidation oscillator is in negative territory at the moment
In a new job On X, the cryptocurrency author Axel Adler Jr provided an overview of the long -term market from the point of view of the liquidation dominance oscillator. The “liquidation” refers to the energetic closure that any open contract undergoes after having collected losses of a certain degree (as defined by its platform).
Naturally, this happens following a drop in the price of long contracts (Paris Haussiers), while after a wave in the case of the shorts (Paris lowering). The risk that these contracts are liquidated to increase the lever for which the investor has opted.
The liquidation dominance oscillator compares long and short liquidations occurring in the sector and represents their balance as an oscillator around the brand of 0%.
You will find below the table of the oscillator shared by the analyst which shows the trend in its mobile average value (MA) in the past two years.
The value of the metric appears to have been negative in recent weeks | Source: @AxelAdlerJr on X
As it is visible in the graph, the 30 -day MA of the Bitcoin liquidation dominator has recently had a negative value, which suggests that shorts have observed more liquidations than long.
This domination of short liquidations has arrived while the price of cryptocurrency has joined a new summit of all time (ATH). From the table, it is obvious that a similar trend was also observed during past rallies.
Generally, mass liquidation events involving shorts help support the increase. However, the analyst underlined it in the graph, an extreme level of domination of short liquidations implies overheated conditions for Bitcoin, its price reaching a summit next door.
Currently, however, the indicator is seated at “just” -11.5%. The rally at the end of 2024 saw the metric reaching a maximum negative value of -16.5%. Likewise, he reached -19% in April 2024 and -24% in January 2023.
“Thus, despite the recent decline, the bullish impulse remains intact – without the type of” overheating “which could trigger clear local inversions,” notes the analyst.
In some other news, the Glassnode chain analysis company has revealed in an X job How the Bitcoin network was biased for institutional participation in the last six months.
The indicator shared by Glassnode is the distribution of unit (URPD) prices, which tells us about the quantity of the cryptocurrency supply was bought for the last time at what levels.
The current entity-adjusted URPD of the asset | Source: Glassnode on X
As the analytical company explains,
Above $ 90,000, the activity is carried out by holders of $ 100,000 BTC. Portfolios> 100K $ BTC are the most concentrated at 74K at $ 76K, large whales (10k to 100k) at 78K at 79k, 85K at 90k and near current levels.
BTC price
Bitcoin has become expired in recent days, because its price is still negotiated around the $ 104,800 bar.
The trend in the BTC price during the last month | Source: BTCUSDT on TradingView
Star image of Dall-E, Glassnode.com, cryptotics.com, tradingView.com graphic
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