HomeBitcoin NewsBitcoin Longs Suffer $150 Million in Liquidations, Derivatives Turning Bearish

Bitcoin Longs Suffer $150 Million in Liquidations, Derivatives Turning Bearish


As bitcoin dropped below $60,000 on Tuesday, over $150 million of longs were liquidated due to the lack of sufficient margins. Longs, or futures, bet on the price increases any asset would witness, thus causing bitcoin’s long traders to register losses. Now, derivatives metrics show how a bullish sentiment has turned neutral among traders after five weeks.

Traders have thus begun moving away from the risks of bitcoin, especially in a time like this. It has been the case since at least June 7, when bitcoin fell over 16% from heights of around $72,000.

Investor enthusiasm in derivatives has been the least since bitcoin began performing well this year, as shown by the bitcoin futures premium. It measures the price difference between Bitcoin derivatives and spot products and reached its lowest on Monday.

The Bitcoin futures premium indicator peaked at 16.5% on June 7 with the asset’s bullish rise but has since decreased weekly with bitcoin prices. It was 8% on June 22, below the 10% marker for bullish scenarios.

Naturally, the selling pressure has increased and is reflected via Bitcoin put (sell) options rising, and is at its highest point in four weeks. Call (buy) options have declined in number. The put-to-call volume ratio has also dropped significantly to 35%, which is still favorable. However, that is a steep decline from last week’s 80%.

The falling bitcoin prices can be attributed to macroeconomic and crypto-related factors. The former includes strong dollar performance, investor interest in less risky products like tech stocks, and more. Crypto-related ones include the German government releasing millions of dollars worth of bitcoins into circulation after holding them since 2013 and the news of Mt Gox returning 140,000 bitcoins to its creditors.

Increased selloffs by miners to recoup their earning slashings after the Bitcoin halving is another reason for the asset’s unsatisfactory performance.


Image by Monoar Rahman Rony from Pixabay


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