Crypto Market Shaken by $245M Bitcoin Long Squeeze, Open Interest Declines

• A $245M Bitcoin long liquidation event triggered significant volatility and a decline in open interest.
• Despite the sell-off, Bitcoin’s open interest and options activity saw slight increases.
• The event highlights the risks of excessive leverage in the crypto market, with traders reassessing market conditions.

A new analysis from CryptoQuant shows a major Bitcoin long liquidation event erased about $245.3 million when Bitcoin hit $89,700. This event also caused a big drop in open interest.

The rapid sell-off led to increased volatility, forcing traders to reassess market conditions as Bitcoin formed a potential new support level. The event shows the dangers of too much leverage in the crypto market..

Long squeezes often lead to cascading liquidations, where forced sell-offs push prices lower, accelerating downward momentum.

How the Bitcoin Long Squeeze Unfolded

A long squeeze occurs when long-position holders are forced to sell as prices decline, CryptoQuant’s Amr Taha explained. 

This starts automatic liquidations, speeding up a fast sell-off. Bitcoin’s fall below $89K resulted in lots of liquidations, removing liquidity from the market.

Wha…

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