Rising energy prices and increased inflation risk due to the US-Iran conflict negatively impacted the leading cryptocurrency, Bitcoin (BTC).
After experiencing an upward trend in early May and reaching over $82,000, BTC has fallen back to around $77,000 due to negative factors.
While BTC found support around $77,000 after the recent pullback, an analytics firm stated that Bitcoin has entered a strong liquidation zone with both upward and downward movements.
In its latest analysis, the analytics firm Alphractal stated that Bitcoin has entered a liquidation squeeze zone, with a total liquidation pressure of $14.3 million accumulating.
The analysis firm reported a risk of large-scale liquidation at very close levels below the current Bitcoin price of $77,400.
“DOWNSIDE — Long liquidation levels are listed as follows:
• $73,716 → $1.61 billion
• $73,281 → cumulative $3.85 billion
• $72,702 → cumulative $5.42 billion
• $72,122 → cumulative $7.14 billion in outstanding liquidity.”
According to the analysis company, a further 6-7% drop below the current price could trigger one of the largest long liquidation movements currently visible in multiple exchange datasets.
Conversely, there is also a significant risk of having large upside short positions. According to Alphractal, these positions are clustered further apart and more sparsely than the current price suggests.
“UPSIDE — Short liquidation levels are as follows:
• $78,786 → $1.66 billion
• $83,422 → cumulative $3.68 billion
• $84,146 → cumulative $5.57 billion
• $88,202 → cumulative $7.20 billion”Short positions are less densely clustered near the current price and concentrated at higher levels, while long positions are aggressively piled up in narrow ranges just below the BTC price.
Analysts concluded from their analysis of the data that liquidation pressure is concentrated below the current price, but dispersed above the current price.
According to analysts, this means one thing: downward movements may come more quickly. *This is not investment advice.
