The cryptocurrency market is shaking with a $ 450 million futures contract position that has been liquidated in the last 24 hours. In the same period, Bitcoin fell more than 7%, with its weaker momentum. Bitcoin’s price on Binance dropped to $ 29,500, retesting a critical support level.

 

 

Open positions in the futures market have been so high recently that the market sees between $ 200 and $ 500 million in liquidation almost every day.

 

What is an open position?

The term open position refers to the sum of active futures contracts that are open. When the number of open positions is high, it indicates that more traders are “guessing” the prices of cryptocurrencies.

Since there are many open positions in the market, gradual liquidations occur even with a small market movement.

This causes Bitcoin to see extreme price volatility in both directions, leading to rapid recovery and deep corrections.

Analysts at the Future Fund announced:

“Miners send BTC to exchanges to sell and Bitcoin goes down. Exchanges liquidate through investors who love leverage. People sell alcoins, thinking the market is doomed. This has been happening for years. Bottoms with smart money and strong hands survive. Do not sell, do not save. ”

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Bitcoin related indicators still not negative

While sentiment regarding Bitcoin remains largely cautious in the short term, two indicators suggest a relief rally in the foreseeable future.

First, the premium on Coinbase has reappeared. This suggests that buyers in the US could accumulate the recent BTC drop. When Bitcoin fell steeply and the premium on Coinbase appeared, BTC had seen rapid rallies before. For example, in late November, when Bitcoin fell to $ 16,000, Coinbase buyers aggressively rejected the $ 16,000 support area.

Second, the premium in the South Korean cryptocurrency exchange market fell from 5% to 1%. For the past two weeks, whales in the Asian market are taking advantage of the premium on South Korean stock exchanges.

This has led to $ 100 million in investments in major cryptocurrency exchanges, including Bithumb. Now that the premium is down, there is a chance that the selling pressure on Bitcoin will decrease, at least in the South Korean market.

The combination of low selling pressure in South Korea and rising premium on Coinbase could contribute to a short-term BTC uptrend.

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