Since the launch of Bitcoin ETFs, notable differences in liquidation trends have emerged between Bitcoin and altcoins. Bitcoin is showing positive metrics while altcoins are facing challenges.
Bitcoin and ETFs: Liquidation Trends
Following the introduction of Bitcoin ETFs, the cryptocurrency market has demonstrated clear differences in liquidation processes. The amount of short liquidations for Bitcoin has increased, while altcoins have faced significant long liquidations. For instance, Binance’s cumulative liquidation delta indicates that Bitcoin’s short liquidations surpassed longs by $190 million.
Altcoins: Liquidation Challenges
On the other hand, altcoins faced a contrasting trend. During the same period, long liquidations outnumbered shorts by nearly $1 billion, indicating a significant market imbalance. Investors were confident in a rally for altcoins, but this expectation was not met, leading to the liquidation of over-leveraged long positions.
Impact of ETFs on Bitcoin
ETF inflows into Bitcoin have widened the gap between Bitcoin and altcoins. While Bitcoin attracts capital and squeezes out shorts, altcoin buyers find themselves in a tough spot. These liquidation trends reflect a shifting market where Bitcoin is increasingly recognized as a safer asset.
The findings indicate that the differences in liquidations between Bitcoin and altcoins are likely to continue. Without capital flowing back into altcoins, the gap in liquidation trends will likely widen.
