Bitcoin’s Swift Rebound Could Trigger $1 Billion Short Position Liquidation Amid Market Uncertainty

If Bitcoin Rebounds, Liquidations Could Reach $1.38 Billion

If Bitcoin swiftly recovers from its recent dip to $71,000 on June 6, over a billion dollars worth of short positions will be liquidated.

On June 7, Bitcoin declined 3.33% to $68,507 before slightly recovering above the crucial $69,000 level. The decline coincides with broader macroeconomic uncertainty following the United States Employment Situation Summary Report, which revealed higher-than-expected job growth in May.

Other cryptocurrencies also experienced declines. Ether fell 3.58% over 24 hours, while altcoins like Solana, Dogecoin, and Pepe experienced significant drops of 5.61%, 8.70%, and 9.99%, respectively, according to CoinMarketCap data.

The market plunge resulted in a $409.51 million liquidation of both short and long positions across the board, with $56.71 million being long positions in Bitcoin.

However, just two days before the price decline, Bitcoin was trading between $70,000 and $71,662. Many traders were optimistic that it might inch closer to its all-time high of $73,679.

Currently, traders are betting that Bitcoin's price may not rebound quickly. If Bitcoin returns to $71,000, $1.38 billion in long positions will be wiped out, indicating that futures traders expect further price declines.

This comes as investors question why Bitcoin's price hasn't surpassed its March all-time highs, despite a 19-day streak of positive inflows into Bitcoin exchange-traded funds (ETFs).

Analysts attribute the lack of price appreciation to multiple factors beyond ETFs. "ETF flows are fantastic, but they are not strong enough to exceed the entire ecosystem selling (yet)," said Capriole Investments founder Charles Edwards.

Crypto trader Christopher Inks emphasizes that "the market is made up of spot, futures, ETFs, and options."