Bitcoin Futures Liquidation May Indicate Local Bottom

According to BlockBeats, on October 4, a CryptoQuant analyst suggested that the liquidation of long positions might have established a local bottom for Bitcoin. Despite the prevailing bearish sentiment and technical indicators pointing to further potential declines, the level of long position liquidations in the Bitcoin futures market indicates a reduction in selling pressure. During significant price drops, the number of contracts purchased often decreases sharply due to liquidations, thereby alleviating market selling pressure. On October 1, over 4,000 BTC long positions were liquidated, marking the second-largest liquidation event of 2024 according to CryptoQuant data. Typically, these high-loss and liquidation moments form local bottoms, opening the door for short-term recovery. Currently, prices may remain within the current range in the short term, but the strength of buying pressure needs to be monitored to reverse the downtrend.