Long positions are facing liquidation amid the price fluctuations of Bitcoin and other major digital assets.
At the start of the trading week, Bitcoin (BTC) displayed a marginal increase, hovering above the $41,000 mark, while Ether (ETH) also experienced a slight uptick, trading above $2,100. Coinglass data reveals a total of $103.5 million in liquidations for token-tracked futures over the past 12 hours, with $95 million of that attributed to long positions—bets on higher prices. Within this liquidation, $33 million was related to Bitcoin positions, $29 million of which were from long Bitcoin positions.
Lucy Hu, a Senior Analyst at the Hong Kong-based digital asset management firm Metalpha, notes that despite the recent Ledger hack affecting sentiment in the DeFi space and raising questions about wallet security, the broader market remains resilient. Hu emphasizes the impact of factors like rate cuts and the growing interest in Bitcoin due to developments like ordinals.
The optimistic outlook for Bitcoin’s long-term growth momentum persists, despite the current correction phase. End-of-year predictions for 2024-2025 are notably positive, with Woo Network targeting a $75,000 price point for BTC in early 2024. Similarly, Bitwise predicts that Bitcoin will trade above $80,000, and foresees the approval of spot Bitcoin ETFs, anticipating it to be the most successful ETF launch in history. Furthermore, Coinbase’s revenue is expected to double, surpassing Wall Street expectations by at least 10 times.
However, the influx of memecoins is causing congestion on Layer-1 chains, leading to a spike in gas fees on Ethereum and other layer-1 chains like Avalanche. Over the last 24 hours, Avalanche has generated $5 million in fees, while Ethereum, with its larger market cap, has seen $13.52 million. Gas fees have also surged on Arbitrum and Optimism in the past week.
This memecoin frenzy has resulted in some layer-1 tokens experiencing declines faster than Bitcoin or Ether, with AVAX down 6% and Solana’s SOL token down 4%.