$71 Million Liquidation Occurs as Bitcoin Falls

▲ Bitcoin plummet/ChatGPT generated image ©

As Bitcoin fell below $77,000, a $71 million liquidation occurred in just one hour, causing the leveraged market to collapse instantly.

According to investment media FXLeaders on April 27 (local time), approximately $71 million in liquidations occurred in the cryptocurrency derivatives market over about an hour, with $69.17 million of this occurring in long positions. As Bitcoin temporarily dropped below the key support level of $77,000, excessive leveraged long positions were intensively cleared.

The main reason for this sharp decline was the low liquidity in the $77,000 to $78,000 range. This section had thin buy and sell orders, making it prone to amplified price shocks, and indeed, concentrated long risks around $77,300 triggered a chain of liquidations all at once. Short positions, on the other hand, were mostly unaffected.

After the liquidation, the market appears to be stabilizing quickly. Bitcoin has recovered to the $77,500 to $78,500 range and showed an intraday gain of approximately 1%. This follows a pattern of retesting major resistance levels after a 10-12% rebound in early April.

Looking at the market structure, open interest remains concentrated in the $77,000 to $80,000 range. On days when volatility expands, daily liquidation volumes often increase from $80 million to over $300 million, indicating that the current range is also over-leveraged.

This liquidation event highlighted how vulnerable the derivatives market is, despite strong inflows into spot Bitcoin ETFs. Recent inflows totaling $2.12 billion over 9 consecutive days had fueled expectations of a rally, but ultimately, the excessive accumulation of leveraged long positions ended up increasing downward pressure.

In the short term, there is also a possibility of a rebound or a short squeeze after entering an oversold zone. However, with $77,000 acting as a key support level and the $78,000 to $80,000 range serving as strong resistance, a volatile market is expected to continue for some time. In the current structure with a high proportion of leverage, risk management is considered more important than directional trading.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*