Bitcoin keeps liquidating longs as BTC price action gives up $22K support
Bitcoin longs get punished by relatively small BTC price losses as BTC/USD trends towards significant support lines.
Bitcoin (BTC) traders remain sensitive even to small price movements as data shows liquidations climbing.
As BTC/USD approaches $21,600 on March 9, those who are long BTC are seeing positions evaporate.
Longs begin to disappear with BTC at three-week lows
Despite consensus forming around Bitcoin retesting $20,000, small shifts in price are still taking their toll on traders.
According to data from monitoring resource Coinglass, March 8 alone saw $24.4 million of BTC longs liquidated, the highest tally in almost a week.
This coincided with BTC/USD heading to three-week lows, abandoning $22,000 as support. At the time of writing, the downtrend continues, while liquidations for the day nonetheless remain negligible.
Including altcoins, March 8 liquidated $95 million of longs and another $15.4 million of shorts. Further data from on-chain analytics firm Glassnode captured the dominance of long versus short liquidations.
Commenting on the action, Filbfilb, co-founder of trading suite Decentrader, argued that it was little surprise that overexposed long positions were feeling the heat.
“Makes sense to wipe out the majority longing against the price direction,” part of Twitter commentary stated.
An accompanying chart showed mounting leveraged position liquidations.
Research warns of “liquidity crisis”
As Cointelegraph reported, Bitcoin price action remains comparatively flat despite the liquidation behavior.
Related: BTC may need to dip to $19.3K to cool Bitcoin profit-taking — new data
February became the least volatile month on record in terms of open and close prices on monthly timeframes.
For financial commentary resource The Kobeissi Letter, however, this served as a warning in itself — and not just for Bitcoin.
Analyzing price behavior after a substantial liquidation event on March 3, Kobeissi forecast a “liquidity crisis” stretching out across macro assets.
“Net liquidations in crypto markets exceeded $200 million in 1 hour. Since then, Bitcoin has traded completely flat and liquidity is gone. Imagine what will happen to broader markets once liquidity dries up,” it wrote.
Such a crisis it meanwhile described as “the biggest risk to markets right now.”