Liquidated bitcoin futures contracts stay at relatively low levels despite the bellwether cryptocurrencyâs daily gain of more than 10% Monday as some traders expect higher price movements.
- Bitcoin soared above $11,400 on Monday, but this volatility only triggered the bankruptcy price for only $133 million worth of bitcoin futures contracts on BitMEX, the leading bitcoin derivatives exchange, according to Skew.
- Breaking above $10,500 was a critical bullish market signal for many traders since bitcoin had stayed below that price since September 2019.
- Mondayâs 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.
- Significantbitcoin pricemovements 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.
- âEveryone knows this is going up,â said Zoran Scekic, managing partner at cryptocurrency trading firm Zorax Capital, adding that he doesnât 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 âabundance of liquidationsâ at the first moderate price correction, however, given the marketâs sentiment shift to bullishness.
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