Bitcoin Holds at $56K as Liquidated Short Tally Reaches $280 Million



After Bitcoin soared past $56,000 Monday night, it was still plenty buoyant on Tuesday morning.

BTC was trading for $56,607.57 early Tuesday morning. In the past day, the Bitcoin price has climbed by 11% and gained 33% since last month, according to CoinGeco data. And over the past day alone, $278 million worth of short Bitcoin positions have been liquidated.

When a short position gets liquidated, that means a trader is forced to close their short position by their broker or exchange. This typically occurs when the value of the asset being shorted increases to a point where the trader’s losses approach or exceed the margin they have posted as collateral.

Essentially, the broker or exchange closes the position to prevent the trader from falling into a debt they cannot repay and protecting the brokerage from potential losses that could affect its financial health and the safety of other traders’ assets.

Meanwhile, Bitcoin open interest has climbed to $25 billion, according to CoinGlass. On CME (Chicago Mercantile Exchange) alone, the open interest has reached an all-time high of $7.8 billion. Binance isn’t far behind it with $6 billion worth of open interest in Bitcoin contracts.

Open interest refers to the total number of outstanding derivatives contracts, like futures and options, that have not yet been settled or closed. Open interest is often used as an indicator of market sentiment—traders open long positions when they’re optimistic and short positions when they think the price of an asset will decrease.

High open interest also indicates more activity and liquidity, which means it’s easier for traders to enter and exit positions without dramatically impacting the price of BTC.

But does this mean we’re in a bull market? Maybe not, according to lead Glassnode analyst James Check.

“This time, short-sellers continue to bet against the prevailing uptrend, getting liquidated as a result,” he wrote on X. “At true bull market peaks, it’s the levered longs that get wiped out.”

Even so, there have been very few days in the history of Bitcoin when BTC closed at a higher price than it did last night, noted the main Glassnode account on X.

Yesterday saw a record-high $1.3 billion worth of funds flow into BlackRock’s iShares Bitcoin Trust ETF. That means the fund now has a staggering $6.6 billion worth of assets under management. At the time of writing, the newly-approved U.S. Bitcoin ETFs now account for just shy of $40 billion worth of Bitcoin.





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