Bitcoin approached a large concentration of leveraged trades as Glassnode warned that forced selling could deepen its decline. The warning came as shrinking trading liquidity and losses on bullish bets increased pressure across crypto markets.
Key Takeaways
- Glassnode identified a liquidation zone between $59,500 and $62,600.
- Crypto liquidations reached $1.64 billion around the Nov. 13 decline.
- Stablecoin supply contracted by $17 billion over a month.
Glassnode Warns of Vulnerable Trades Below Bitcoins Price
Glassnode, a firm that analyzes public blockchain data and crypto markets, issued a warning about concentrated long positions on Nov. 14. These bullish trades seek to profit from rising prices, and their liquidation cluster marks a zone where many could be forcibly closed. The firm stated:
“BTC price is approaching a massive liquidation cluster. The August breakout left behind these long entries. Markets tend to gravitate toward spots of fragility such as this. After weeks of selling, this could be the accelerant for a final capitulation flush.”
“BTC price is approaching a massive liquidation cluster. The August breakout left behind these long entries. Markets tend to gravitate toward spots of fragility such as this. After weeks of selling, this could be the accelerant for a final capitulation flush.”
Glassnodes Nov. 11 analysis placed the largest modeled liquidation cluster between $59,500 and $62,600 on a six-month heatmap, which uses brighter colors to indicate heavier concentrations of potential futures closures. That zone had remained untouched since the August low, while the breakout that month left those long entries, or opening points for bullish trades, in place. A capitulation flush would describe a burst of selling as traders abandon their bets under pressure.
Brighter bands show larger modeled liquidation concentrations below bitcoins price. Source: Glassnode.
As of 5:51 p.m. EST on Nov. 14, bitcoin traded at $63,602, down 6.90%, or $4,714.58, over 24 hours. The price was down 14.81% over one week and 21.45% over one month. Its one-year decline stood at 31.70%.
Bitcoin fell 6.90% over 24 hours as of 5:51 p.m. EST on Nov. 14. Source: Bitcoin.com.Forced Closures Meet Shrinking Trading Liquidity
Leverage lets traders control exposure larger than the funds committed, with collateral serving as backing for their trades. When losses leave too little margin to meet an exchanges minimum requirement for keeping a trade open, the platform can trigger liquidations of bullish futures positions. Those closures can add selling pressure, particularly when many trades reach their thresholds together.
Broader strains in crypto liquidity and derivatives positioning included approximately $1.64 billion in liquidations during a 24-hour period surrounding the Nov. 13 decline, nearly 90% involving bullish trades. Liquidity describes the markets ability to absorb transactions without large price changes, while derivatives positioning measures exposure through contracts tied to underlying assets. By Nov. 14, Glassnode also reported that stablecoin supply had contracted by $17 billion over a month, reducing capital available within crypto markets.
U.S. spot bitcoin exchange-traded funds (ETFs) recorded $185.4 million in net outflows on Nov. 13, including $143.5 million from Blackrock and $41.9 million from Fidelity. Withdrawals totaled approximately $1.07 billion during Nov. 9-13, with every session ending negative. Nov. 13 marked the seventh consecutive trading day of net outflows, extending the streak that began Nov. 5.
Selective Buying Offers a Counterpoint to Selling
Earlier liquidation rounds had already cleared many long positions built up during the decline from September, Glassnode noted on Nov. 11. That reduced the concentration of vulnerable trades near the price prevailing when the analysis was published. The deeper August cluster remained, creating a distinction between leverage already removed and exposure still vulnerable below the market.
Despite the decline, Glassnodes Nov. 11 assessment of weakening demand and selective accumulation showed renewed buying among wallets holding 100 to 1,000 BTC and 1,000 to 10,000 BTC. These cohorts group wallet addresses by balance, and accumulation describes increases in their holdings. Smaller holders and the largest cohort continued reducing balances, leaving buying concentrated among selected groups.
Meanwhile, expectations of higher U.S. interest rates added to the financial backdrop. CME Fedwatch, which estimates Federal Reserve decision probabilities from futures prices, assigned an 88.5% probability to a quarter-point increase and 11.5% to a half-point move on Nov. 14. The Feds policy meeting was scheduled for Dec. 8-9.
About the author
WRITTEN BYKevin Helms
Kevin Helms is a cryptocurrency journalist specializing in Bitcoin, blockchain regulation, and global digital asset markets.