- Bitcoin long liquidations surged, peaking at $82.5K, indicating market instability as overleveraged traders face repeated wipeouts.
- Institutional investors are hedging risks with $100M in BTC put options, suggesting caution amid increasing market uncertainty.
- Failure to consolidate above $80K could lead to further liquidation waves, intensifying price swings and potential sharp pullbacks.
Bitcoin traders are facing extreme volatility, with liquidations surging to levels unseen since September 2023. According to Darkfost, investors continuously attempt to long Bitcoin during dips, only to face repeated liquidations.
This pattern also started between September and November 2024, a recurring trend. With price swings increasing, overleveraged positions are being wiped out. Market corrections are intensifying the impact of liquidations, leading to cascading sell-offs. However, historical trends suggest that once excess leverage is cleared, the market often stabilizes.
Massive Liquidations at Key Price Levels
Data shows that major liquidation events correlate with price declines. Large green spikes indicate periods of forced selling, with notable occurrences when Bitcoin traded between $70,000 and $90,000.
The most recent spike happened at $82,500, indicating the connection between overleveraged positions and sudden sell offs. As Bitcoin’s price surges, traders increasingly take on leverage, often leading to sharp reversals.
This cycle played out in mid 2023 when approximately 6,000 liquidations occurred during a major market downturn. With Bitcoin approaching psychological resistance zones, traders should anticipate further volatility. Any failure to consolidate at higher levels could lead to additional liquidation waves.
Leverage and Market Instability
The influx of leveraged trades has intensified Bitcoin’s price fluctuations. High liquidations often indicate excessive leverage, forcing sell offs that contribute to market instability. When traders overextend positions, even minor price shifts can lead to liquidations, leading to rapid downward movements.
According to Greeks Live, institutional traders have been increasing their exposure to put options. A recent options block trade saw over 1,000 BTC puts purchased, to expire on April 25, 2025, with a strike price of $60,000. This transaction, valued at nearly $100 million, suggests a preference for risk hedging amid market uncertainty.
Put Option Activity Increases Amid Market Uncertainty
Following the latest quarterly delivery, institutions are primarily building positions rather than engaging in aggressive speculative trades. Greeks Live notes a visible shift toward protective strategies, with increased demand for deep out-of-the-money puts.
These positions serve as a hedge against sharp market downturns, suggesting a cautious approach from major traders. With Bitcoin’s price testing key resistance zones, further market corrections remain a possibility.
If consolidation occurs above $80,000, leveraged traders may drive the price higher. However, continued liquidation spikes could indicate instability, increasing the risk of sharp pullbacks.
