A possible spot exchange-traded fund (ETF) approval in the United States has continued to fuel confidence, while peak gold prices have added to the positive sentiment around bitcoin (BTC) and ether (ETH), which have increased by as much as 4% in the last day.
Early on Monday, BTC surpassed $41,000, bringing its year-to-date gains to more than 152%.
Exchanges liquidated $220 million worth of crypto perpetual futures holdings over the weekend, according to data from CoinGlass. Almost 85% of the total was made up of bullish longs.
Since Friday, bets against price increases in bitcoin, known as shorts, have been liquidated for a total of almost $120 million. Open interest jumped by 6% on Monday in other markets as traders raised their leveraged bets in anticipation of higher volatility.
Open interest on the exchange BitMEX surged 90% in a matter of hours to $420 million from over $200 million on Saturday, according to analysts at Coinanlyze, who informed CoinDesk in an X message. This suggests a major player has placed significant wagers on the platform.
When an exchange forcibly ends a trader’s leveraged position because the trader has lost all or part of their initial margin, this is referred to as liquidation. It occurs when a trader doesn’t have enough money to maintain an open position in a leveraged position or can’t meet the margin requirements for the position.
Significant liquidation events can serve as potential signals for trend reversals, enabling traders to dynamically rebalance their exposure.
This kind of data is helpful to traders because it indicates that leverage is successfully being removed from popular futures products, which functions as a short-term indicator of a decrease in price volatility.