Traders with a bearish bias saw massive liquidations in the last four days as Bitcoin (CRYPTO: BTC) surged 17% to a price of $44,700.
What Happened: According to data from on-chain analytics platform CryptoQuant, $229 million worth of short positions were liquidated in the crypto perpetual futures market after Bitcoin breached the $43,800 mark.
$BTC market price($43.8K) spiked by +17.4% in the past 4 days
— CryptoQuant.com (@cryptoquant_com) February 8, 2022
- $229.2M short positions were liquidated in the perpetual markets in the past 4 days
- Aggregated funding rate is currently negative
Set Funding Rate Alert https://t.co/Ceg4lh6mqL pic.twitter.com/WUnlU3PJW4
As of early Tuesday morning, data showed that aggregated funding rates were negative, meaning that despite the high-value liquidations, most traders are still betting on lower prices.
Funding rates typically indicate traders’ sentiment in the perpetual swaps market. Negative funding rates indicate that short position traders are dominant and are willing to pay long traders. Negative funding rates indicate that a large proportion of traders are bearish.
Data from Coinglass confirms even more short positions were liquidated in the last 24 hours. A total of 66,964 traders were liquidated for $255 million, of which $182 million were short positions.
In the last day, $91.9 million BTC, $37 million Ethereum (CRYPTO: ETH), $5.7 million Shiba Inu (CRYPTO: SHIB) and $1.81 million Dogecoin (CRYPTO: DOGE) shorts were liquidated.
According to Glassnode, Bitcoin’s counter-trend rally is likely to have been partially influenced by a short squeezem evidenced by a large number of short liquidations.
After three months in a persistent downtrend, #Bitcoin has experienced a counter-trend rally, pushing above $44k.
— glassnode (@glassnode) February 7, 2022
Short liquidation dominance has also increased, suggesting that a short squeeze is a partial driver of the move.
Read more in our analysishttps://t.co/5IWpwaxDSU pic.twitter.com/L0f6hGahLh
