Bitcoin's Brief Pump Above $28K Leads To Steep Losses Among Short Traders, Triggers $130M Liquidations

Bitcoin briefly spiked above the $28,000 price level in the early trading hours Monday, which led to nearly $130 million in liquidations and saw short traders experience steep losses.

The world's largest cryptocurrency asset by market capitalization broke through the $28,000 price region and peaked at $28, 432 over the past 24 hours, but retraced to $27,960 at around 9 a.m. ET on Monday.

This brief surge in the price of Bitcoin triggered $55 million in liquidations for traders who held positions in the asset, with the market seeing $129.1 million leaving exchanges and 35,000 traders liquidating over the past 24 hours, data from crypto futures trading and information platform Coinglass showed.

Moreover, short traders lost $1404.45 million at around the same time, with Bitcoin, along with Ethereum – the second largest crypto asset by market capitalization, taking more than $68 million of those losses.

Long traders saw $25.46 million in liquidations with Bitcoin and Ethereum taking up 50% of the losses.

Most of the liquidations took place on centralized cryptocurrency exchange platforms like Binance, ByBit and OKX. The exchanges accounted for more than 70% of the overall liquidations, with 99% being short positions.

Other CEXs like Bitmex, Deribit and Huobi also listed significant amounts of liquidations, with the former listing the liquidation of XBTUSD worth $7.28 million.

The brief spike in the price of Bitcoin on Monday was fueled by the official confirmation that the U.S. government has reached an agreement on the debt ceiling, which President Joe Biden described as an "important step forward that reduces spending while protecting critical programs for working people and growing the economy for everyone."

Bitcoin wallets also showed a rebound in terms of activities, with active addresses surging to 960,000. It indicates an increasing utility that is necessary for the maiden crypto to sustain its price rally, according to data from crypto intelligence portal Santiment.

"May's concerningly low Bitcoin address activity is finally starting to rebound again. Increasing utility is necessary for crypto assets to enjoy sustained rallies. Keep an eye on whether $BTC can head into June with 1M or more daily active addresses," Santiment tweeted over the weekend.

Bitcoin, which has left the $28,000 price level, saw a 0.91% loss and was trading in the red zone at $27,841.25 with a 24-hour volume of $13,452,126,460 as of 11:20 p.m. ET on Monday, data from CoinMarketCap showed.