Bitcoin and ether (ETH) briefly inched above 68,500$ and 3,700$, respectively, as euphoria from multiple catalysts continued into its second week. But profit-taking began in early Asian hours, with bitcoin falling to as low as $64,500 before regaining the $67,000 level.
The broader CoinDesk 20 index (CD20), rose over 6%.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/IRTVET7OXVD37OSHXOXPJCH4BU.png)
Longs, or bets on higher prices, lost over $240 million, while shorts or bets on lower prices saw $320 million in evaporated positions.
Futures tracking dogecoin (DOGE), shiba inu (SHIB) and pepecoin (PEPE) lost a cumulative $90 million across exchanges in a highly unusual move. Bullish bets on DOGE reached a lifetime high last week, contributing to its 110% weekly move.
Liquidation is when an exchange forcefully closes a trader’s leveraged position due to a partial or total loss of the trader’s initial margin. Large liquidations can signal the local top or bottom of a steep price move, which may allow traders to position themselves accordingly.
Traders widely expect bitcoin to cross its lifetime peaks ahead of April’s halving event, while there are also expectations of the approval of a spot ether exchange-traded fund (ETF) in May.
As such, some funds expect leverage to increase in the coming days as bitcoin approaches its lifetime highs at $69,000.
“Leveraged buyers will likely not relent until we break all-time highs, which could be any time now,” crypto fund QCP Capital said in a Tuesday broadcast on Telegram. “This is a similar magnitude of leverage to what we saw in 2021, pushing the front-end of the curve higher and keeping the back-end elevated.”
Leveraged bets on crypto futures to increase to over $66 billion in the past week, while funding rates on some tokens have zoomed to over 100% annualized. Funding is the amount traders pay when they borrow additional money to place bigger trades.
Meanwhile, some analysts consider the unusually large moves in SHIB tokens, as meme coin outperformance has historically marked local tops on bitcoin due to speculative froth.
