Crypto Liquidation Risk Stays Moderate Despite Sell Pressure
Ongoing long liquidations pressure crypto markets, but no major liquidation cascade is expected for now.
- Net liquidations remain negative, showing long wipeouts.
- Z-Score shows liquidation pressure is moderate, not extreme.
- Market under pressure, but no signs of a sharp crash yet.
The crypto market is experiencing a wave of long liquidations, with net liquidations staying around –$40 million. This indicates that traders betting on rising prices continue to get wiped out, adding to downward pressure.
Such long liquidations often reflect bearish market sentiment and forced exits, where leveraged traders are liquidated due to falling prices. However, despite the ongoing pressure, this doesn’t necessarily signal a sharp crash ahead.
Moderate Z-Score Suggests No Panic Selling Ahead
One key indicator offering some relief is the Liquidation Intensity Z-Score over a 365-day period, which currently sits at a neutral to moderate level. This score measures how intense liquidations are compared to historical averages.
A neutral Z-Score means we’re not seeing extreme levels of forced selling — which is typically a warning sign of a cascading market drop. In simple terms, while traders are being liquidated, it’s not at the kind of volume that would trigger panic across the market.
Bearish Pressure Continues, But No Crash Fuel Yet
The current situation is a mixed bag. On one hand, there’s clear bearish pressure from long liquidations. On the other, the lack of extreme liquidation activity suggests the market isn’t at immediate risk of a deep, liquidation-driven crash.
Crypto traders should stay cautious, especially those using leverage. While the market isn’t showing signs of a violent selloff, the pressure from ongoing long liquidations could continue to cap any upside in the near term.
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