According to data from Coinglass, the total notional value of leveraged long Bitcoin derivatives traders still exceeds $40 billion, even after the recent wave of liquidations. Short positions predominantly hover above $71,000, amounting to approximately $12 billion in notional value. Currently, futures contracts hold a total open interest of $35 billion, while options contracts stand at $31 billion.
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The Coinglass Liquidation Heatmap illustrates a color band representing various price ranges at which a certain amount of notional value is at risk of liquidation. Progressing from purple to yellow, the colors signify increasing notional value and the corresponding higher positions subject to liquidation if prices move through those ranges.
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In scenarios where Bitcoin’s price approaches levels indicated by warmer colors, such as yellow, it implies a heightened risk of forced sell orders (for long positions) or buy orders (for short positions) to cover leveraged positions. This situation could potentially lead to significant price volatility. Traders utilize this information to identify potential support and resistance zones, as well as to gauge market sentiment and anticipate possible price movements.
Despite reaching $35 billion, Bitcoin’s future open interest remains at an all-time high. However, unlike in 2021, CME futures now constitute over 30% of the market, resulting in fewer instances of over-leveraged positions. Unlike platforms like Binance or OKX, where traders can leverage up to 100x, CME does not offer leverage on the same scale.
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