Bitcoin: $48M short liquidations and extreme greed – Is a plunge coming?

Bitcoin has seen a slight decline, pausing the revisiting of its ATH.
The market is now in greed as many anticipate BTC hitting its ATH again.

As Bitcoin’s price surged toward the $72,000 mark, a noticeable spike in short liquidations swept through the market. The rise in liquidations signals the intense volatility in recent days, as many short positions were caught off-guard by Bitcoin’s upward momentum.

The convergence of Bitcoin’s price movements with the Fear and Greed Index reveals the underlying sentiment driving these fluctuations.

Short liquidations hit new highs amid Bitcoin rally

Bitcoin’s price rally over the past week has led to a significant uptick in futures short liquidations across major exchanges.

According to data from Glassnode, total short liquidations reached unprecedented levels, with over $48 million wiped out in a single day as BTC pushed beyond critical resistance levels.

This spike in liquidations illustrates the market’s reaction to the bullish momentum, as traders betting on a price decline were forced to exit their positions in rapid succession.

Source: Glassnode

The liquidation volume highlights the sensitivity of leveraged short positions to Bitcoin’s price fluctuations. With the market now pushing the $72,000 threshold, short traders are retreating to avoid further liquidation losses.

The cascade effect of liquidations tends to fuel price momentum further, as forced buy-backs on short contracts drive Bitcoin’s price upward.