Cryptocurrency analytics firm Alphractal has released a critical update on Bitcoin’s leverage risks, sharing two potential price scenarios in the near term.
According to Alphractal, Bitcoin can do one of the following:
- It may exceed $111,000 to liquidate short positions opened since December 2024.
- It may fall below $80,000 to liquidate long positions opened since November 2024.
The company’s data shows that based on Total Liquidation Levels over the past six months, there are twice as many long positions that have not yet been liquidated as short positions, explaining why investors face greater losses during market declines than during price increases.
According to the analyst firm, there is low liquidity and minimal trading activity in the $72,000 to $86,000 range, raising concerns about sudden price swings.
Bitcoin’s open interest fell from $76 billion to $59 billion, signaling a waning appetite for leverage.
Alphractal also noted that long positions on Bitfinex are rising again, a trend that has historically preceded price declines, especially post-2021. If this trend continues, Bitcoin could face downward pressure in the coming weeks, according to analysts.
*This is not investment advice.
