Bitcoin: Liquidation of $1.5 billion in shorts awaits investors if price breaks above $72,000
Blockchain analyst Willy Wu suggests that a liquidation wave could begin once Bitcoin (BTC) reaches $72,000.
Wu points out that about $1.5 billion worth of short positions are ready for liquidation, reaching $75,000 and above.
BREAKING: (F*ck knows what “breaking” means but people click on it).
Tapping 72k is the fuse that's set to start a liquation cascade. $1.5b of short positions ready to be liquidated all the way up to $75k and a new all time high. https://t.co/uYugscJkVF pic.twitter.com/23rspMcgLT
- Willy Woo (@woonomic) June 5, 2024
Wu also delves into the Bitcoin the macro oscillator (BMO), which combines four indicators: market value to realized value (MVRV), weighted average price ratio (VWAP), "cumulative value-days destroyed" (CVDD) and Sharpe ratio.
MVRV evaluates Bitcoin's market capitalization relative to its realized capitalization, helping to determine its valuation.
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Is it a good time to buy Bitcoin at this price?VWAP calculates the average traded price of an asset by taking into account both volume and price, helping traders to gauge its buy or sell status.
CVD tracks the cumulative amount of the metric, which takes into account the time since the coins were last moved, against the age of the market.
The Sharpe ratio, on the other hand, compares an investment's return to its risk, offering insight into its volatility-adjusted performance.
Wu explains, "2.5 months of consolidation amid bullish demand benefited Bitcoin, allowing more room for price growth ahead of a potential peak."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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