An analyst has explained why the recent high in Bitcoin has experienced different market conditions than those observed during the 2021 bull run peak.
Bitcoin Liquidations Have Been Short-Dominated In Recent Market High
In a new post on X, on-chain analyst Checkmate pointed out how the latest 2024 high achieved following the spot exchange-traded fund (ETF) inflows has a major difference when compared to the 2021 peak.
The difference lies in the trend registered on derivatives markets. Below is the chart shared by the analyst that shows the trend in the dominance of long liquidations in the sector over the last few years.
“Liquidation” here naturally refers to the act of forceful closure that any derivatives market contract undergoes on an exchange when it accumulates losses of a certain degree.
The risk of a contract getting liquidated becomes higher, and the more volatile the asset price gets. During sharp rallies and crashes, huge amounts of liquidation can pile up
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