Downbeat Traders Lose $2.5 Billion in Liquidations as Bitcoin Prices Soar to New Highs

More than $2.5 billion in short positions were liquidated across major crypto exchanges over the period, according to data from Coinglass, the analytics service.

According to the “Real-Time Liquidations” tracker on Coinglass, more than $92.5 million was liquidated at 05:42 UTC, marking one of the largest single hourly liquidation events of the week and demonstrating the intensity of market moves.

Trading risks

Those who missed out on the latest rally experienced the risks of trading against upward momentum in an increasingly bullish environment for digital assets, especially Bitcoin.

Short liquidations can trigger a reinforcing loop. As positions are liquidated, forced buybacks for bearish traders at higher price levels drive additional upward price momentum. Increased buying pressure pushes prices even further, prompting a new wave of liquidations—thus perpetuating the cycle.

Bitcoin's meteoric rise

After several months stuck below $75,000, Bitcoin began a rapid upward trajectory in late May. The digital asset began trading above the $100,000 level in June and has since accelerated its meteoric rise this month after reaching a new all-time high of $122,000 on 14 July.

Bitcoin and other cryptocurrencies have surged following significant institutional inflows into crypto ETFs. Meanwhile, lawmakers in Washington are gearing up for a packed agenda as “Crypto Week” kicks off Monday, with expectations high for the passage of several bills that would establish a regulatory framework for the digital asset industry.