Bitcoin faces $1.27B long liquidation cascade if price breaks $60,941

Leveraged bulls have stacked longs into a market with thinning liquidity, and a break below $60,941 could trigger a $1.27 billion cascade of forced selling.

Bitcoin faces $1.27 billion in long liquidations below $60,941, while a rally above $67,145 could trigger $970 million in short squeezes, CoinGlass data shows.

"The $57,000 level is a key region to watch. If Bitcoin trades down into that area, we could see a massive wave of long liquidations," Joao Wedson, CEO of crypto analytics platform Alphractal, said.

The risk grows with thin trading volumes. The number of active futures contracts is unusually large relative to trading volume, a combination that means a large batch of leveraged longs getting liquidated could hit thin order books, producing a sharper, faster drop rather than an orderly pullback.

Bitcoin traded near $64,176 as of 01:55 UTC on Aug. 18, holding above the realized price median of $63,200 that has provided support over the past two weeks. A break below that level could put the June low of $57,803 back in focus, while a confirmed inverse head-and-shoulders pattern on the daily chart could open the door to a rally toward $76,000.

Leverage Builds Into a Thinning Market

Bitfinex analysts noted that bitcoin is showing mid-to-late bear market characteristics, with price trading between the long-term holder realized price of $52,699 and the short-term holder realized price of $67,176. Past crypto bear cycles have seen severe crashes of 76 percent to 84 percent. The latest one, which began at highs above $126,000 last October, has so far only cut prices in half.

Wedson said the market typically sees a large liquidation wave before bottoming out. "Before bitcoin formed its 2022 bottom, the market went through one final major liquidation event," he said on X.

The price has also held firmly above $62,000 despite a series of negative macroeconomic developments, including regulatory delays, rising bond yields and ongoing U.S.–Iran tensions. When an asset remains resilient in the face of bad news, it is often viewed as a sign that the market may be turning the corner and entering a bullish phase.

Fundstrat analysts have separately warned that bitcoin could swing 30 percent in either direction as volatility hits record lows, a setup that historically precedes sharp directional moves. The compression in realized volatility, combined with the liquidation clusters at $60,941 and $67,145, suggests the market is building toward a decisive breakout.

For traders, the liquidation clusters on major centralized exchanges highlight concentrated leverage across derivatives markets that could increase volatility and force rapid price moves. The $60,941 and $67,145 levels are critical to monitor, as they could act as triggers for forced selling or buying. Ethereum, the second-largest cryptocurrency, has shown correlation with bitcoin's price action, and a sharp move in BTC could spill over to the broader digital asset market.

This article is for informational purposes only and does not constitute investment advice.