The latest analytical data shared by Glassnode shows that on Monday, January 11, liquidation of Bitcoin futures worth $ 410 million occurred on Binance. Glassnode states that this number is the highest daily value to date.
Binance Bitcoin Futures Mass Liquidations and the Bitcoin Price
In the futures market, positions face liquidation when traders raise additional capital to trade with larger classes. The disadvantage of leverage is that a slightly lower Bitcoin price can liquidate a position or lose value.
When a long position gets liquidated, it is available on the market. When most markets long Bitcoin and long contracts get liquidated, there is tremendous selling pressure.
On January 11, the Bitcoin market experienced a big long push caused by a large order to sell on Coinbase. When whales or high-net-worth investors sold, this resulted in liquidating long contracts in a few hours.
Successive liquidations created a domino effect resulting in a massive sell-off and a 16% correction. However, one sign of bullishness is that it ended around $ 32,700 in whale map analysts refer to as the whale’s support area.
There is a whale cluster creation when a whale buys Bitcoin at a certain level and doesn’t transfer it. This level is often a support zone as whales tend to double down on their entries if a significant dip occurs and the BTC price will fall back down to this level.
Bitcoin started correction on January 10 and continued the next day. Overall, it lost more than 20 per cent, down from $ 41,000 to $ 31,153. However, according to data from CoinMarketCap, the leading crypto has so far recovered to the $ 35,800 range.
Earlier this year, on January 4, large bitcoin amounts were liquidated in a $ 190 million futures contract on Binance in just 10 minutes, causing Bitcoin to retreat from the $ 34,000 to $ 30,000 zone.
Bitcoin Optimism Remains
Even though Bitcoin has fallen sharply, the overall market sentiment around BTC generally remains bullish.
Elias Simos, a protocol specialist at Bison Trails, said the number of whales increased after Bitcoin experienced a sharp price drop. Trends show that with the advent of the liquidation cascade, the whales accumulate, which is positive.
While the current drop from 15% to 25% is the most significant decline so far for this cycle of an uptrend, Bitcoin enthusiasts should note that many 30% corrections took place during Bitcoin’s 2017 upcycle. The current fall in BTC prices coincides with forming the bottom of the dollar strength index.
Bitcoin futures were up $ 1.06 trillion in December, up 21.6 percent from November. Bitcoin options volume recorded an increase of 18.9% from November to December. Deribit held 82.1%, bit.com had 7.88%, and OKEx maintained 7.3% of the total $ 17.89 billion bitcoin options volume.