Bitcoin Remains Above $109K as Long-Term Investors Increase Holdings During Liquidation Events

Bitcoin continues to show strength even after a recent market downturn that briefly took it away from its peak levels. Following a rise past the $111,000 mark last week, the cryptocurrency has seen a slight correction since then.

Currently, BTC is valued at $109,874, marking a daily increase of 2.3%. This shift occurs within a broader positive sentiment in the cryptocurrency market, as traders assess recent fluctuations in relation to longer-term trends.

At the same time, experts monitoring on-chain data indicate that this recent pullback might pave the way for more stable market activity.

High Leverage Triggers Liquidations Below Key Support Levels

Amr Taha, associated with CryptoQuant’s QuickTake platform, pointed out that Bitcoin’s movement has led to the liquidation of over-leveraged traders, thereby offering long-term investors a chance to strengthen their positions.

His piece, titled “Late Longs Wiped Out — Long-Term Holders Seize the Opportunity to Accumulate Bitcoin,” highlights distinctive market behaviors currently taking place.

Taha observed that Bitcoin’s decline past the crucial $111,000 psychological barrier resulted in two notable liquidation clusters on Binance. The initial wave hit at approximately $110,900, eliminating more than $97 million in long positions.

A short time later, another wave struck as the price fell below $109,000, causing an additional $88 million in liquidations. These sequential events reflect rapid margin calls from traders leveraging high positions, a common occurrence during sharp short-term price corrections.

It’s important to note that liquidation clusters commonly arise when swift price changes trigger the automatic closing of margin accounts, amplifying selling pressure. Such volatility often leads to the exit of speculative traders and can indicate a temporary slowdown or consolidation in the overall market trend.

Taha noted that while the market digested these liquidations, long-term holders remained active, demonstrating resilience amid the volatility.

Long-Term Holders Accumulate as Liquidations Unfold

While short-term traders felt the brunt of the downward movement, long-term holders viewed the price drop as an opportunity to buy. Taha pointed out that on-chain data indicates the realized cap of long-term holders—representing the total value paid for their coins—has surpassed $28 billion.

This figure hasn’t been seen since April, underscoring the notion that experienced market players are increasing their stakes during times of market turbulence.

The actions of long-term holders often serve as an indicator of market strength. Their consistent accumulation during liquidation episodes signals confidence in Bitcoin’s future value trajectory.

Historically, periods when long-term holders accumulate during volatile spells have corresponded with subsequent price increases, as these coins are effectively removed from circulation, easing selling pressure.

With leveraged positions recalibrated and structural accumulation in progress, the stage may be set for Bitcoin to make another attempt at surpassing its prior highs.