Liquidation of $433 million – Lessons on Leverage in a Bear Market

Bitcoin's breakout above $71,000 is not just a number, but also a "shockwave" for traders using leverage. The liquidation of over $433 million in a short period is proof of the market's harshness when the "Extreme Fear" sentiment still prevails. #Colecolen
Most of the liquidated orders belong to (short positions), those who bet that Bitcoin would continue to decline under geopolitical pressure. This creates a "short squeeze" effect (short squeeze), when rising prices force traders to buy back Bitcoin to close their positions, inadvertently pushing the price even higher. This event reminds us of the risks of trading based on crowd sentiment. When everyone is overly pessimistic, the market tends to move in the opposite direction to seek liquidity. However, price increases driven by liquidations rather than genuine buying pressure from end users are often unsustainable and can lead to sudden reversals. $BTC