Key Points
The cryptocurrency market is currently experiencing high volatility as liquidations increase. Both Bitcoin and Ethereum have moved into the overbought zone.
Data from Coinglass shows that total cryptocurrency liquidations have surged by 70% in the last day. This has brought the total to $650 million, which includes $366 million in longs and $284 million in shorts.
The increase in short liquidations has primarily affected a few rising tokens, including Bitcoin. However, most crypto assets are seeing long liquidations. This could indicate a potential cooling down of the market as signs of overheating emerge.
Bitcoin and Ethereum Liquidations
Bitcoin’s liquidations have amounted to $122.1 million, according to Coinglass data. This includes $37.5 million in longs and $84.6 million in shorts. The increase can be attributed to Bitcoin’s rally to a new all-time high of $81,858, leading to a market cap of $1.6 trillion.
Ethereum, on the other hand, has seen $91.2 million in liquidations over the past day. This consists of $56.7 million in longs and $34.5 million in shorts. Ethereum has begun to lose momentum after reaching a three-month high of $3,241.
The majority of these liquidations, worth $262 million, occurred on Binance, the largest crypto exchange by trading volume. 59% of these were long positions.
Coinglass data also shows that total crypto open interest increased by 1.13% over the past day. It currently stands at $91.9 billion. The global cryptocurrency market cap has also reached a three-year high of $2.9 trillion, with a trading volume exceeding $300 billion.
Bitcoin’s rise above the $80,000 mark has pushed it into the overbought zone. Its Relative Strength Index (RSI) has reached 75, which often occurs following a sudden price surge. This increases the likelihood of short-term profit-taking.
Ethereum has experienced a similar trend. Its price surpassed $3,200, pushing its RSI to 74. Ethereum’s price has declined by 1% in the last 24 hours and is currently trading at $3,150. This could be due to the start of long liquidations.
Increased market volatility is expected due to rising open interest, liquidations, and trading volume. Cameron Winklevoss, co-founder of Gemini, believes that the bull run has not been triggered by retail investors. Conversely, CryptoQuant CEO Ki Young Ju suggests that the futures market might be “overheated”, potentially indicating a bearish 2025.
