The recent Bitcoin rally to new highs has set the crypto market ablaze, with a cascade of liquidations following the surge in price. Data from Coinglass reveals that crypto liquidations have jumped by 70% over the past 24 hours, with a staggering $650 million wiped out.
Both Bitcoin and Ethereum have entered overbought zones, igniting debate on whether a market correction is just around the corner.
Record-Breaking Bitcoin Rally Pushes Liquidations to $650M
Bitcoin’s march to an all-time high of $81,858 spurred heightened activity across exchanges, leading to $366 million in long liquidations and $284 million in shorts over the past day.
The flagship cryptocurrency alone saw $122 million liquidated, split between $37.5 million in longs and $84.6 million in shorts, highlighting the sharp price fluctuations traders have been riding. Bitcoin’s surge has brought its market cap to $1.6 trillion, while Ethereum’s latest move pushed its price to $3,241 before settling slightly lower.
Binance, the largest exchange by trading volume, saw the majority of these liquidations—approximately $262 million, with nearly 60% in long positions.
The rising open interest of 1.13% at $91.9 billion indicates improving trader optimism even as risk emotions are still on the ascent. Still, some of these long liquidations hint that some traders entered the market too Large, with the intent of imposing themselves on the recent surge.
With Bitcoin’s Relative Strength Index (RSI) at 75 and Ethereum’s at 74, both assets now sit in the overbought zone. This metric has historically served as a caution signal, often followed by pullbacks as traders lock in gains.
Way Forward For The Market
Although the crypto market was able to sustain growth in recent periods, such RSI levels imply a possibility for profit taking. To this end, short-term traders may now be preparing for future patterns of an increase in volatility.
Since then, opinions have differed among analysts on what comes next. Cameron Winklevoss at Gemini stated retail involvement has remained relatively low signaling there is much growth and therefore may not continue to keep up higher prices.
CryptoQuant’s CEO, Ki Young Ju, sees the futures market as “overheated,” potentially signaling challenges ahead. The combination of high liquidations, inflated RSI levels, and rising open interest presents a classic setup for a short-term correction.
Crypto’s latest surge has reminded the market of its signature volatility. As Bitcoin and Ethereum settle in overbought zones, the potential for a pullback looms large, especially if liquidation pressures continue to mount. For now, investors are closely watching price movements and preparing for whatever direction the market takes next.
