Bitcoin faces significant liquidation risks as it approaches the critical $120,000 price level. Should the cryptocurrency surpass this threshold, it could trigger approximately $1.503 billion in short position liquidations across major cryptocurrency exchanges.
Conversely, a price drop below $116,000 poses an equally substantial threat to leveraged long positions, potentially causing liquidations valued at around $1.310 billion.
The proximity of these massive liquidation clusters significantly increases the potential for heightened short-term volatility in the Bitcoin market. Large-scale liquidations in either direction can propel prices further as forced position closures trigger cascading price movements.
Market participants engaging in leveraged trading are advised to closely monitor these critical price zones, as they represent key levels where rapid market shifts are more likely to occur.