While leveraged positions of Bitcoin (BTC) investors in the cryptocurrency market are closely monitored, Alphractal CEO Joao Wedson drew attention to the increasing liquidation risk, particularly in long positions. According to Wedson, data from the past six months shows that long positions are accumulating faster than short positions in the Bitcoin market, and downward liquidity concentration is becoming increasingly pronounced.
The analyst stated that, in the current outlook, the most critical level is around $57,000.
The Largest Long Liquidation Zone in Bitcoin is Between $56,400 and $58,300
According to six months of Bitcoin liquidation data shared by Wedson, the largest long position liquidation zone is concentrated between $56,400 and $58,300.
In this region, some individual liquidation clusters are approaching $2 billion in size. The strongest liquidation level is around $57,300.
According to the analyst, a drop in the Bitcoin price to $57,300 could lead to the liquidation of approximately $1.93 billion in potential long positions.
Billion-Dollar Liquidation Clusters Also Exist in the $51,000 Region
The downside risk for Bitcoin is not limited to the $57,000 region alone.
Wedson noted that there is also a significant long liquidation area between $51,000 and $51,900. It is stated that several different liquidation clusters in this region have exceeded $1 billion in size.
This is considered a significant factor that could increase the likelihood of a chain reaction liquidation of leveraged long positions in the event of a sharp pullback in Bitcoin price.
Critical Zone for Short Positions: $70,000-$71,200
In upward movements, the most important liquidation zone for short positions is between $70,000 and $71,200.
According to Wedson, there are potential clusters of short liquidations within this price range, reaching approximately $1 billion at multiple levels.
However, the analyst emphasized that the key difference between the long and short sides was the concentration of liquidation, rather than the total amount.
Joao Wedson: $57,000 Is the Level I Worry About
Wedson stated that long liquidity, which exists below Bitcoin’s current price, is becoming increasingly concentrated, particularly around $57,000.
The analyst noted that this data doesn’t necessarily mean the Bitcoin price will fall to that region, but it’s important because it shows where highly leveraged positions are accumulating.
Wedson stated that the excessive concentration of leveraged trading on one side of the market could increase liquidation chain risk, and that the $57,000 level remained his biggest concern.
If the Bitcoin price approaches the $57,000 level in the coming period, the liquidation of large long positions could accelerate selling pressure and lead to a wider wave of liquidations.
