Traders Increase Leverage on Bitcoin, Heightening Liquidation Risks

Traders are leveraging positions to push Bitcoin (BTC) to previous highs, increasing risk for a potential downside derivatives unwind if prices fall.

Skew advises caution on opening large long positions in BTC due to potential "toxic flows."
A trader holding a short position on BTC is facing a $7.5 million unrealized loss, having shorted $234 million with an entry at $111,386. They added $10 million in stablecoins to support their position, with liquidation at $121,510.
The Kingfisher data indicates a significant liquidation risk between $113,300 and $114,500, which could trigger a cascade down to the $110,000 support level.

BTC is currently trading around $115,000, experiencing low volatility and stagnating within its range for over two months.