Bitcoin Price Plunges Amid Leveraged Short Positions
Key Summary
Bitcoin fell 2.3% in two hours amid suspicion over leveraged short positions, leading to $550M in crypto long position liquidations. The move occurred after overhead ask liquidity thickened on exchange order books, keeping the spot price from rising past $86,500. Bitcoin's 21-day simple moving average near $83,850 provided nearby support, but the decisive area below this level remains $82,500.
Overview of Crypto Liquidations
Crypto liquidations hit $550 million as Bitcoin's price dipped below $84,000. This move came after overhead ask liquidity thickened on exchange order books, keeping the spot price from rising past $86,500. Data from CoinGlass shows cumulative 24-hour crypto long liquidations hitting $550 million.
Bitcoin's Price Movement
Bitcoin fell 2.3% in two hours amid suspicion over the appearance of leveraged BTC short positions on Hyperliquid. The price drop was before returning to circle $84,000 at the time of writing.
Leverage and Overhead Ask Liquidity
Four wallets used stablecoin USD Coin (USDC) to open shorts on 148.49 BTC with 40x leverage on Hyperliquid, onchain data from Lookonchain and others reveals. After the long position flush, open interest (OI) immediately began to rebound across the 21 exchanges tracked by CoinGlass. OI increased from around $54.2 billion to $55.3 billion over six hours between 4 a.m. and 10 a.m. UTC.
Support and Resistance Levels
Despite trading 1.8% lower on the day, Bitcoin preserved nearby support in the form of its 21-day simple moving average (SMA) near $83,850. Previously, Cointelegraph reported that this level forms a line in the sand for bulls on low time frames. Below this trend line, $82,500 remains as a decisive area for Bitcoin’s broader uptrend. It forms a key level as part of an inverse head-and-shoulders reversal pattern, which is still playing out on the weekly chart.
Market Commentary
In his latest market commentary, trader and analyst Rekt Capital explained that a daily candle close above $86,700 would be required to maintain a bullish setup. “At the moment, Bitcoin is lacking that lower timeframe confirmation relative to this key level for continuation,” he told X followers on Tuesday. The decisive area below this level remains $82,500, a key level as part of an inverse head-and-shoulders reversal pattern.