A 10% Bitcoin jump could trigger $4.3B short liquidations

Bitcoin traded near $68,600 on Monday, holding to a recent $60,000 to $72,000 range. Price swings stayed elevated as liquidity remained thin and positioning skewed toward shorts.

Spot bitcoin exchange-traded funds recorded $360 million in net outflows last week. Ether-linked products saw $161 million exit, while Solana and XRP funds took in $13 million and $7.6 million, respectively. Across digital-asset ETPs, investors pulled about $3.7 billion over the past four weeks.

Derivatives positioning points to asymmetric risk. A 10% rise in bitcoin would be likely to liquidate about $4.3 billion in short positions, compared with roughly $2.4 billion in potential long liquidations on a similar drop.

Macro readings have been mixed. U.S. consumer inflation slowed to 2.4% year over year, below a 2.5% forecast, and core inflation matched estimates at 2.5%. January payrolls rose by 130,000, nearly double expectations. Investors are watching Federal Reserve minutes and upcoming GDP and PCE data later this week for signals on the path of rates.

On-chain metrics were uneven. Measures of unrealized profit and loss fell into a zone often seen during later-stage pullbacks, and spot price stayed below the average cost basis of short-term holders. At the same time, exchange outflows to larger entities increased.

Institutional positioning shifted in select areas. Harvard University disclosed a 21% reduction in bitcoin ETF holdings and increased exposure to ether, pointing to rotation rather than broader risk accumulation.

Traders are focused on whether ETF redemptions stabilize, how crowded shorts react to any upside pressure, and incoming U.S. data. For now, Bitcoin remains pinned near $68,000 as the market awaits a clearer catalyst.

As we wrote previously, Bitcoin entrepreneur Anthony Pompliano said investors face a “test” as US inflation cools. He argued Bitcoin’s long-run thesis hinges on its fixed supply and the possibility of renewed money creation, while short-term macro drivers and easing price pressures are changing how traders price the asset against the US dollar.