Bitcoin longs speculated to have been leveraged more than shorts

  • 19 July 2019, Friday, 22:40

Bitcoin’s market movements have been closely scrutinized by the entire community, with many speculating the movement of the world’s largest cryptocurrency to be a sign for the rest of the market as well.

A new analysis by Skew Markets showed that there were many minor liquidations during Bitcoin’s most recent surge over $1000, which the organization claimed as “another data point on shorts being less leverage than longs.”

One cryptocurrency enthusiast, @ShrimpFi, speculated,

“One reason is because it is collateralized with bitcoin? Example: A -33% move to liquidate a 2x long position, but a +99% move to liquidate a 2x short position. Both are 2x.”

According to the analysis, the buy liquidations for Bitcoin clocked in at an average of $173,000, while it peaked at $6 million. The total buy liquidations amounted to $117.5 million. At the same time, the sell liquidations maxed out at $10 million, while it held an average of $342,000. The sell liquidation metric was much higher than that of the buy liquidation metric, staying at $326.3 million.

The graph reflected that sell liquidations on an hourly basis almost hit the $50 million mark, closing at approximately $45 million. Some other members in the community pointed out the relevance of the metric, with @hasufl, a Twitter user, stating,

“Important data point that there is fundamental, non-speculative demand for the short side of the perpetual swap, e.g. to hedge inventory or create synthetic cash.”

Bitcoin shorts were in the news recently after Bitcoin’s last surge over $10k resulted in shorts worth $64.38 million getting liquidated. Many speculated that BitMEX’s leverage offer of 100x was one of the reasons for the market fatality.

At press time, Bitcoin was enjoying a 4.3 percent uptrend, resulting in the cryptocurrency trading at $10,517. BTC held a total market cap of $187.48 billion, with a 24-hour market volume of $25.19 billion.

Source: ambcrypto.com