New all-time highs in short liquidations—at least when measured in dollars—indicate extreme market sentiment.


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Liquidation records this week as the relatively modest price increase shows just how bearish the market is.

Data from online analytics platform CryptoQuant confirms that USD short liquidation hit an all-time high in October.

Two days, half a billion dollars of short ETH
Not only Bitcoin

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This has caused the bears to take a hit this week – exchange data also shows that short-term Ethereum assets are taking a big hit.

According to data from Cointelegraph Markets Pro and TradingView, ETH/USD posted a pretty impressive rally on October 25-26, climbing from $1,337 to $1,593 on Bitstamp.

ETH/USD 1-day candlestick chart (Bitstamp). Source: Trading View
Although it is not unusual for crypto and altcoins in particular, the market changes caused by the price movement were noticeable.

As with Bitcoin, the market has cut ETH sales sharply, anticipating a move to new macroeconomic lows after weeks of sideways moves and failed breakouts.

Thus, it only took about $250 to liquidate even more short positions (in US dollars) – $275 million on October 25 and another $250 million the next day.

USD ETH short liquidation chart. Source: CryptoQuant
In two days, positions worth more than half a billion dollars were deleted and there is not even a record in ETH – the value of positions was 189,638 ETH and 161,986 ETH, respectively.

ETH to ETH short liquidation chart. Source: CryptoQuant
“$ETH short squeeze for the last two days in a row. CryptoQuant CEO Ki Yong Joo commented on the data: Daily short selling across all exchanges has reached an all-time high.

BTC clears speculators
As Cointelegraph reported, the picture for bitcoin has been broadly similar as prices have strengthened.

Related: Bitcoin Weak Hands ‘Mostly Gone’ as BTC Ignores Falls in Amazon and Meta Stocks

Exchanges recorded $328 million and $332 million in short liquidations on October 25 and 26, respectively, according to the latest data from online analytics resource Coinglass.

BTC liquidation schedule. Source: coin glass
The October 27th scoreboard was already much lower at $5.7 million, which is in line with established norms as bitcoin consolidates above $20,000.

However, exchange users have bet that the rally will continue, as evidenced by the largest ever daily drop in BTC balances on major exchange Binance.

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Source: CoinTelegraph