Our 43% rally this month, may have been one of the biggest short liquidations events in Crypto as 85% of traders were short and only 15% long during that time.

This month Crypto really did what it does best, shocking literally everyone with its moves that no one could have expected and this time we could actually say that it was EVERYONE. For that lets first rewind to the sentiment just after the FTX-implosion: Even more people had left the market and the remaining ones were to nearly 100% sure that we would go lower as $15k is in no way the current bottom, predictions of $10k were being passed around just as $100k prediction one year prior.

Then Crypto did what it was meant to do, prove that no one can predict the market. Especially if everyone had the same prediction, this caused a 43% rally in one month, the biggest monthly gain since the very hype-peaks of the 2021 bull run. This flushed out $495M short contracts that were liquidated, which happened during the three occasional pumps we had, as seen below:

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From Glassnode

Such a dubious high number does not actually tell us much about the situation back then as there could have possibly been a lot of long liquidations too… That is not the case, we had 85% of the liquidations being short and only 15% of those liquidations were long. This is the largest ratio in the recent history. For comparison, before the FTX implosion we had also hit a record but wich was only 75% long to 25% short.

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From Glassnode

This clearly shows how wrong people were, how the crypto market will do the exact thing people do not expect and as always once again a warning to not use leverage to such an extent as this is literally like gambling even more while gambling already.