Main Takeaways:-
- Altcoins experience $1 billion in long liquidations as Bitcoin spikes in short liquidations.
- Diverging liquidation trends show an increasing risk difference between BTC and altcoins after the ETF launch.
Since spot Bitcoin ETFs were introduced, the market has clearly split between Bitcoin and altcoins, especially in how liquidations happen.
As Bitcoin’s value surged, short liquidations increased. On the other hand, altcoins experienced heavy long liquidations as investors overvalued a rally.
Binance’s Cumulative Liquidation Delta (CLD) shows this difference. Bitcoin short positions were closed $190 million more than long positions, meaning strong buying pressure pushed short sellers to give up.
Altcoins Under Pressure Following Previous Bullish Forecasts
Altcoins experienced the reverse trend. During the same time, long liquidations surpassed short positions by nearly $1 billion.
This shows the market is very unbalanced. Investors were right to believe Bitcoin would do well, but they were wrong to think altcoins would also go up.
Instead of going up, altcoins kept dropping. Many traders using borrowed money lost their positions, especially when the market got more unstable and price support did not hold.
While risky assets with borrowed money had a hard time, Bitcoin grew more popular with big investors thanks to ETF investments.
Risk Appetite Broadens: What It Means for Markets
Since December 2024, the difference in liquidations has grown. More altcoins have been liquidated compared to Bitcoin, by several measures.
This trend mentioned an increasing risk divide in crypto. Bitcoin is observed as a safer, institutional-grade asset; altcoins are still risky and can lose more value.
ETF inflows into Bitcoin have increased this gap. As Bitcoin engages capital and short positions are forced to close, altcoin buyers are getting caught.
People expected an altcoin boom, but instead, billions were lost when many long trades were forced to close.
What Market Divergence Tells Us About the Road Ahead
These liquidation trends indicate a changing market. Altcoins are having a hard time keeping up with Bitcoin’s rise, which is being driven by strong demand. Right now, investors are mainly interested in Bitcoin, not the rest of the crypto market.
If money does not start moving back into altcoins, the difference between them and Bitcoin will keep growing. Using borrowed money to trade is still risky, especially with anything other than Bitcoin.
The results are easy to see on the daily altcoin market cap chart.
Read also:- Dogecoin’s $12 Target: A Historical Pattern Reemerges
Disclaimer: We at Bitcoinik.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
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