The crypto market is currently experiencing a high level of volatility, with an increase in long liquidations. Both Bitcoin and Ethereum have entered the overbought zone.
According to data from Coinglass, the total value of crypto liquidations has risen by 70% in the past day, reaching $650 million. Of this amount, $366 million are long positions, while $284 million are short positions.
Only a few tokens, including Bitcoin (BTC), have seen an increase in short liquidations. The majority of crypto assets have been experiencing long liquidations, indicating a potential cooldown in the market as the highly volatile sector shows signs of overheating.
Bitcoin has witnessed $122.1 million in liquidations, with $37.5 million in longs and $84.6 million in shorts, according to Coinglass. This is primarily due to the flagship asset reaching a new all-time high of $81,858 with a market cap of $1.6 trillion.
On the other hand, Ethereum has recorded $91.2 million in liquidations over the past day, with $56.7 million in longs and $34.5 million in shorts, as reported by Coinglass. The leading altcoin has already begun its downward momentum from its three-month high of $3,241.
The majority of the liquidations, amounting to $262 million, have occurred on Binance, the largest crypto exchange by trading volume. Among these liquidations, 59% are long positions.
Data from Coinglass also shows that the total crypto open interest has increased by 1.13% in the past day and is currently sitting at $91.9 billion. The global cryptocurrency market cap has reached a three-year high of $2.9 trillion, with a trading volume exceeding $300 billion.
Bitcoin’s surge above the $80,000 mark has put it in the overbought zone, with its Relative Strength Index (RSI) reaching 75. This typically occurs when there is a sudden price surge, increasing the likelihood of short-term profit-taking. Ethereum has experienced a similar movement, with its price surpassing $3,200 and its RSI currently at 74.
The leading altcoin has declined by 1% in the past 24 hours and is currently trading at $3,150. One major factor contributing to this decline is the start of long liquidations.
Given the increasing open interest, liquidations, and trading volume, it is expected that there will be high volatility in the market before another major push.
Cameron Winklevoss, co-founder of Gemini, believes that the current bull run has not been driven by retail investors. On the other hand, Ki Young Ju, CEO of CryptoQuant, suggests that the futures market has become “overheated” and may indicate a bearish outlook for 2025.
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