According to Coinglass’ liquidation chart, there is a looming risk of $1.2 billion worth of leveraged short positions being liquidated if Bitcoin’s price reaches $95,076.
This scenario underscores the significant volume of bearish wagers currently placed against Bitcoin, the leading cryptocurrency by market cap. Traders who take short positions borrow Bitcoin to sell it with the expectation that its value will drop, allowing them to repurchase at a lower price and earn profits from the difference.
When these traders lack sufficient collateral to support their leveraged bets, exchanges automatically close their positions through liquidations. Should Bitcoin climb to $95,076, this forced closure would result in substantial buying pressure as shorts are covered, which could further propel Bitcoin’s price upward.
At present, Bitcoin is trading around $91,895 after retreating from levels above $94,000 ahead of the Federal Open Market Committee (FOMC) announcement, according to CoinGecko data.