Bitcoin's price dipped this morning before rallying sharply, causing significant losses for both long and short position holders. Data suggests even more volatile swings may be on the horizon.
In the early hours of May 8, the Federal Reserve announced it would keep interest rates steady at 4.25%-4.5%, triggering a brief downturn in Bitcoin (BTC) prices, which dropped to as low as $95,866. However, the cryptocurrency quickly rebounded, soaring past $98,000 to reach its highest level since February.
Bitcoin Price Trend, Source: CoinMarketCap.
The wild "dip-and-rally" action within a single day led to massive liquidations on both sides of the market. According to Coinglass, over 80,000 traders were liquidated in the past 24 hours, with total long and short losses reaching around $90 million, split roughly evenly between the two.
Crypto Market Liquidation Data, Source: Coinglass.
Additionally, Coinglass data reveals that if Bitcoin breaks above $100,000, the total short liquidation pressure across major CEXs could hit $396 million. Conversely, if BTC falls below $96,000, long liquidations may surge to $305 million.
This means extreme price swings in either direction could trigger massive, near-equal liquidation volumes, potentially leading to a violent wick scenario—where Bitcoin briefly spikes above $100K before plunging abruptly, wiping out both longs and shorts again. Traders may want to consider reducing leverage*to mitigate risks.
* The content presented above, whether from a third party or not, is considered as general advice only. This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.
