The liquidation heat map shows more of the liquidation risk clustered above current prices, not below. That means a downward move is unlikely to be amplified by a cascade of forced selling; The real danger is for those who find themselves in a short position.
Open interest has increased by about 0.28% in the last 24 hours even as the price fell by about 3%, indicating that traders are not closing their short positions, but rather doubling down and betting on a breakout of the $58,000 support level. Funding rates are also negative, another sign that the market is paying a premium for downside exposure.
Spot market depth reinforces strength beneath delicate surface; CoinGlass data shows that there are a total of 6,900 BTC ($409 million) in bids on the order book between the current price and $50,000, while there are only 1,570 BTC ($93 million) in resting sell orders between the current price of $70,000, creating a bullish bias in terms of supply.
Typically, in scenarios like this, when a clearly overcrowded trade is identified, astute traders and market makers will target that weakness and move the price in the other direction. This could lead those who are short to close their positions to avoid paying financing and avoid liquidation.
