Traders are using leverage in an attempt to lift bitcoin (BTC) back to record highs, creating a high-risk environment that could result in a derivatives unwind to the downside if price begins to shift the other way.
Market analyst Skew warned one trader intent on opening a nine-figure long position to “maybe wait for spot to carry the buying so it doesn’t create toxic flows.”
Bears are also adding leverage, with a separate trader currently dealing with a $7.5 million unrealized loss after shorting BTC to the tune of $234 million with an entry at $111,386. That trader added $10 million worth of stablecoins to maintain their position, with the liquidation currently standing at $121,510.
But the major liquidation risk is present to the downside, with data from The Kingfisher showing a large pocket of derivatives will be liquidated between $113,300 and $114,500, which could potentially prompt a liquidation cascade back to the $110,000 level of support.
“This chart shows where traders are over-leveraged,” wrote The Kingfisher. “It’s a pain map. Price tends to get sucked into those zones to clear out positions. Use this data so you don’t end up on the wrong side of a big move.”
Bitcoin is currently trading quietly around $115,000 having entered a period of low volatility, failing to break out of its current range for more than two months.
Read MoreCoinDesk: Bitcoin, Ethereum, Crypto News and Price Data[#item_full_content]
For readers tracking where the market is actually changing, this is the part that matters.…
The headline number is useful, but the real story is what it says about positioning.…
Miners must redirect their hashrate before the July 31 cutoff, as the pool will stop…
The Nasdaq-listed Korean media company once lined up $1 billion in financing to buy 10,000…
The bank said Strategy's bitcoin sales policy adds avoidable market uncertainty and should be replaced…
Bitcoin Magazine Metaplanet Adds 2,823 Bitcoin, Reaches 43,000 BTC and Becomes World’s Third-Largest Corporate Treasury…