In the past few days, a large-scale cascade of liquidations has swept through the market. In one of the latest 24-hour snapshots, the amount was around $674 million, with a significant portion attributed to shorts. On Binance Square at the same time, liquidations of BTC and ETH in the tens and hundreds of millions of dollars were being discussed. (Binance)
But the main question right now isn’t:
“Bull market or bear market?”
Something far more interesting is this:
WHO’S LEFT IN THE MARKET AFTER THIS CASCADE AND WHAT POSITIONS ARE BEING BUILT NOW?
📊 BTC is back above $80,000
As of September 19, Bitcoin is trading above $80,000. On Friday, BTC climbed to around $80,587, gaining more than 5% for the day. (The Wall Street Journal)
At the same time, the rise happened on a rather unusual backdrop.
The U.S. Federal Reserve recently raised the rate to a range of 3.75–4.00%, and the yield on 10-year U.S. Treasury notes rose above 5%.
So the macro backdrop can’t be called clearly favorable for risky assets. (Reuters)
And yet Bitcoin recovered above $80K.
This matters.
Because sometimes much more information comes not from the market’s reaction to bad news itself, but from how the market behaves after it.
💥 What does $674M in liquidations actually mean?
A liquidation is the forced closure of a trader’s position when their margin is no longer sufficient to maintain the position with leverage.
Let’s assume:
A trader opens a LONG BTC position with high leverage.
BTC is falling.
Margin decreases.
The exchange closes the position.
That means additional sell-side pressure.
But now let’s imagine the opposite scenario
A trader opens a SHORT.
BTC starts rising sharply.
The exchange forcibly closes the SHORT.
To close a short position, you effectively need to buy BTC.
And it turns out that:
BTC rises → shorts liquidation → forced buying → even more upside → new shorts liquidations.
This is called a short squeeze.
And that’s exactly why a sharp price move sometimes greatly exceeds the initial impulse.
🧨 But there’s an important trap here
Many will see:
$674M in liquidations
and immediately draw a conclusion:
“Leverage has been wiped out—so the market must continue to rise.”
No.
Liquidations are not an independent bullish signal.
They primarily show that there were many leveraged positions on the market.
After they close, the market can:
Scenario #1 — continue the rally
If after liquidations there’s genuine spot demand, the price holds new levels, and open interest starts rising gradually, the move may get continuation.
Scenario #2 — shift into consolidation
Leverage has been cleared → fewer aggressive participants → the market starts building a new position.
In that case, the sharp impulse can end in a sideways range.
Scenario #3 — reverse
If the price is rising purely due to the closing of shorts, but there isn’t enough real spot demand, then after the short squeeze ends, the buyer may disappear.
And then the reverse move begins.
So looking only at Liquidations is a mistake.
🔎 What should you look at together with liquidations?
I would use at least 5 indicators.
1️⃣ Open Interest
If the price is rising while OI is dropping sharply, it’s possible the market is just closing shorts.
If the price is rising and OI gradually increases, new positions may be entering the market.
But even here, you can’t draw conclusions from just one indicator.
2️⃣ Funding Rate
Funding shows the cost of holding a position on perpetual futures.
As of September 19, BTC funding remained positive, and open interest on Binance over the past week increased by roughly $780M. (Xoomar)
This is already more interesting than just the liquidation number.
Positive funding means that currently longs are paying shorts.
But moderately positive funding alone still doesn’t mean overheating.
3️⃣ Spot Volume
This is one of the indicators I wouldn’t ignore.
If BTC is rising:
Spot ↑ + OI ↑ + price holds the breakout
— the structure of the move looks different than:
Weak spot + OI ↓ + massive short liquidations.
In the second case, a significant part of the move can be explained by derivatives themselves.
4️⃣ Liquidation Map
Here you can look for potential zones where leveraged positions are concentrated.
If there’s a large concentration of SHORT liquidation levels above the current price, a sudden move upward can trigger a new wave of forced buying.
And if below the price there are LONG liquidation levels piled up, the drop can turn into a cascade of sell-offs.
5️⃣ BTC Dominance
And this is where it gets really interesting.
If Bitcoin is rising but, at the same time, ETH and large altcoins start accelerating, that may indicate broader demand spreading.
As of September 19, ETH traded above $2,600, and SOL above $110; over 24 hours, SOL showed stronger dynamics than BTC. (Binance)
This is worth keeping an eye on.
🐋 What’s happening with altcoins?
Here, the situation is especially interesting.
In early September, the total Open Interest of altcoin perpetual contracts first surpassed Bitcoin’s since December 2024.
On September 6, it was about roughly:
ALT OI — $40B
against
BTC OI — $23.9B. (CryptoVino)
That means the derivatives market is becoming more and more focused on altcoins.
And here a potentially dangerous combination appears:
altcoin rally + high OI + leverage + FOMO
That’s exactly how conditions are formed where a single sharp impulse against the crowd can trigger an enormous liquidation cascade.
⚠️ The most interesting signal right now
In my view, right now it’s far more important not just the $674M figure itself.
It’s more important to watch what the market DOES after the leverage has been cleared.
If after liquidations:
🟢 BTC holds $80K+
🟢 volume remains high
🟢 spot demand persists
🟢 OI recovers gradually
🟢 funding doesn’t become extreme
🟢 ETH and SOL keep participating in the move
— the market structure will look significantly more stable.
But if:
🔴 BTC loses $80K
🔴 OI surges without spot confirmation
🔴 funding becomes excessively positive
🔴 altcoins start rallying sharply purely on futures
🔴 new large liquidation clusters appear
— the risk of another cascade increases.
🧠 The key takeaway
$674M in liquidations is not a forecast of market direction.
This is information about how aggressively the market used leverage.
That’s why professional analysis should start not with:
“Long or short?”
And from the question:
Where’s the liquidity?
Where’s the leverage?
Who is forced to buy or sell right now?
Is the price rising due to real demand or liquidations?
What happens to OI after the move?
And only after that does it make sense to assess the market structure.
Right now, Bitcoin is above $80,000, and after a sharp move, the market is simultaneously showing increased activity in ETH, SOL, and a number of altcoins. So the trader’s nearest task is not to guess the next candle, but to understand whether a new position is being built—or whether the market is simply chewing through the remaining leverage after the short squeeze. (Binance)
The crypto market rarely warns twice. But it almost always leaves traces in OI, funding, volumes, and liquidations.
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