🚨 $1.1 Billion of Bitcoin Shorts will be liquididated at 108K
GAME ON 🔥
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Can't short Bitcoin. Just can't.
Okay, let's break down this "Bitcoin Exchange Liquidation Map" from Coinglass. This is a visual tool used by traders to understand potential price movements based on where liquidations are likely to occur on different cryptocurrency exchanges. Here's a detailed explanation:
**What it Shows:**
This chart displays the levels (price points) where significant liquidations are expected to happen for both *short* and *long* positions across various exchanges (Binance, OKX, Bybit). Liquidations occur when traders' positions are forcibly closed due to insufficient funds to cover losses, and it can trigger cascading effects in the market.
**Key Components:**
1. **X-axis (Horizontal):** Represents time. You see dates from around September 21, 2023, up to November 20, 2023.
2. **Y-axis (Vertical):** Represents the amount of liquidation in US Dollars (USD). It's scaled in millions ($M). The right side shows a price scale correlating to where the liquidations will happen.
3. **Cumulative Short Liquidation Leverage (Green bars):** These green bars show the levels where *short* positions (bets that the price will go down) are likely to be liquidated. A higher green bar means a larger amount of short positions are vulnerable.
4. **Cumulative Long Liquidation Leverage (Red bars):** These red bars show the levels where *long* positions (bets that the price will go up) are likely to be liquidated. A higher red bar means a larger amount of long positions are vulnerable.
5. **Exchange Colors:** The bars are broken down by exchange:
* **Blue:** Binance
* **Orange:** OKX
* **Green:** Bybit
* The different shades within each color differentiate between different price levels.
6. **Current Price (104759):** Marked with a dotted line. This is a crucial reference point. The current price is within the range of the 104,759 point.
7. **Liquidations:** Liquidations are the forced closure of a trader's position due to a margin call. A margin call happens when a trader doesn't have enough funds to cover the losses.
**How to Interpret the Chart:**
* **Price Movement Prediction:**
* **If the price goes *up*:** As the price increases, it will hit the red bars (long liquidation levels). This can trigger a cascade of liquidations of long positions, which could *accelerate* the price increase (a "short squeeze" where short sellers are forced to buy to cover their positions).
* **If the price goes *down*:** As the price decreases, it will hit the green bars (short liquidation levels). This can trigger a cascade of liquidations of short positions, potentially *accelerating* the price decrease (a "long squeeze" where long holders are forced to sell).
* **Levels of Support and Resistance:** The areas with large concentrations of liquidation levels can sometimes act as informal support (price bounces up) or resistance (price struggles to go higher) points.
* **Exchange-Specific Analysis:** The chart allows you to see which exchanges have the most vulnerable positions at different price levels.
**What the Chart Shows Regarding the Recent Price Action (as of the image):**
* **Price Action:** The price has been on the rise for the past few months.
* **Liquidations:** A spike in liquidations happened around 10/30/23.
* **Concentrated Long Positions:** There's a considerable concentration of long positions waiting to be liquidated around the 104,759 mark.
**In Essence:**
This chart is a heatmap of potential liquidation zones. Traders use it to anticipate price movements and manage risk. It's important to note that this is *not* a guaranteed predictor of future price action, but it provides valuable insight into market sentiment and vulnerability. The bigger the liquidation level, the more significant the potential impact on the price.
... aaaaaaaand it's gone!
😎
smoked em