Bitcoin ($BTC) is experiencing significant market pressure due to the high level of leverage among traders on major exchanges. This creates liquidation risks for both long and short positions.
Liquidation Risks from High Leverage
Data from The Kingfisher’s Aggregated LiqMap shows that depending on Bitcoin’s next price move, both short and long traders are at risk. There is a large concentration of liquidation points around the $111,000 mark, which could trigger aggressive liquidations and amplify market volatility.
Declining Exchange Reserves as an Accumulation Signal
A sharp decline in Bitcoin’s exchange reserves indicates that many investors are shifting towards long-term holding strategies. According to CryptoQuant data, around 79,000 BTC worth approximately $8.87 billion has been withdrawn from exchanges in the past month. This decline from 2.55 million BTC to 2.48 million BTC suggests reduced selling pressure in the market.
Price Fluctuations and Reduced Trading Activity
As of the latest data, Bitcoin's price is highly volatile. After peaking at $112,350, it dropped sharply and stabilized just above the $110,500 support level. This price fluctuation has led to reduced trading activity, with a nearly 27% drop in trading volume over the past 24 hours. Lower trading volume often signals market uncertainty and reduced investor confidence.
Therefore, the high leverage is creating significant liquidation risks in the Bitcoin market, while declining exchange reserves and price fluctuations indicate changing trading activity and potential future trends.
