Liquidated bitcoin futures contracts stay at relatively low levels despite the bellwether cryptocurrency’s daily gain of more than 10% Monday as some traders expect higher price movements.
- Breaking above $10,500 was a critical bullish market signal for many traders since bitcoin had stayed below that price since September 2019.
- Monday’s liquidations are less than half the amount of contracts closed by liquidation on May 10, when bitcoin briefly dropped 15% to $8,100 from a daily open of $9,500.
- Significant bitcoin price movements generally trigger the liquidation of hundreds of millions in futures contracts by reaching pockets of market liquidity that has accumulated over time or are traded with excessive leverage.
- “Everyone knows this is going up,” said Zoran Scekic, managing partner at cryptocurrency trading firm Zorax Capital, adding that he doesn’t think retail traders are in over-leveraged short positions at this point, which could be the reason behind relatively low levels of liquidated futures contracts.
- Scekic expects an “abundance of liquidations” at the first moderate price correction, however, given the market's sentiment shift to bullishness.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.