Potential Liquidation Catastrophe Looming for Bitcoin and Ethereum - An Examination...
Crypto Market's Bull Run: BTC and ETH Seizing Opportunities, But Are Shorts Waiting to Pounce?Share* Tweet
Bitcoin [BTC] and Ethereum [ETH] are cruising on a bullish wave, forcing around $1 billion in liquidations on the 8th of May, with an astounding 80% coming from short positions. But fear not, bears—it's not said and done just yet.
RSI on both majors is yelling "red hot," sailing deep into overbought territory. Historically, this is when momentum takes a dive and tactical shorts start circling.
Gaze at the latest data from Coinglass, and you'll spot a gruesome spectacle: 139,241 traders were crushed in the past 24 hours, with total liquidations reaching a whopping $328 million.
Despite bullish enthusiasm, it's the longs who got slapped the hardest, coughing up $170 million. That's the harsh reality of late-stage volatility.
But what's coming next?
Tightening Grip, Flashing Red Signs
With BTC and ETH hovering precariously above key resistance-turned-support levels, we're teetering on the edge.
Momentum indicators are flashing caution: At press time, RSI is on fire, and On-Balance Volume (OBV) is slowing down— classic signs of a retail-driven rally running on fumes. On the flip side, Open Interest (OI) surged 1.25% to $137.44 billion, hinting at increased leveraged exposure.
Source: Coinglass
That's not necessarily bullish. In fact, with thinning bid walls, this spike in OI could be the perfect storm, laying the groundwork for a bloody liquidation cascade if support falters.
ETH has already felt the sting of a $61.25 million long cessation in the last 24 hours, while BTC eviscerated over $600k in longs in the 4-hour span.
The $170 million long squeeze might just be the prelude to a bloodbath, and if the market falters, it's going to be a bumpy ride.
Crypto Kings: setting sail or sinking ship?
As BTC and ETH beckon local highs, the next move rests in the hands of the big dogs.
Whale activity at these levels typically screams one of two things: a distribution trap or a controlled consolidation above supply.
Either way, the markets are about to get shaken, and it's the whales who decide whether this is re-accumulation or exit liquidity.
Why? Momentum indicators are flashing exhaustion, and clever shorters are creeping in.
Take a peek at the latest on Lookonchain, and you'll spot a whale shifting $13 million USDC into Hyperliquid, betting on a near-term reversal for both BTC and ETH.
Unless the smart money swoops in to maintain the momentum and trap the shorts once more, the thin bid-side and spent upside momentum could send the market careening.
If the bulls slip here, we may be staring down the barrel of a cascading unwind—retribution for the $1 billion in short liquidations orchestrated earlier this week.
- The cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) have been experiencing a bullish surge, causing approximately $1 billion in liquidations, with 80% coming from short positions.
- Despite the bullish momentum, technical indicators such as RSI and OBV are flashing warning signs, suggesting that momentum could take a dive and tactical shorts could start circulating.
- In the past 24 hours, 139,241 traders were liquidated, totaling $328 million, with long positions losing $170 million.
- The current market situation, with thinning bid walls and increased Open Interest, could potentially set the stage for a liquidation cascade if support levels falter, signaling a possible market correction.
