Bitcoin Bulls Leave Short Sellers with $100 Million Losses
Despite the recent surge in Bitcoin’s price near $40,000, wrapped Bitcoin (wBTC) on Ethereum has not seen a corresponding increase.
Short Sellers Lose Over $100 Million
The recent crypto market upswing caught many traders off-guard, resulting in over $140 million in liquidations. Short sellers bore the brunt of over $110 million in losses, marking the second-largest amount of short liquidations since mid-November.
Bitcoin traders faced significant liquidations totaling $36 million, while Ethereum traders experienced about $32 million in liquidations. Solana traders encountered over $6 million in liquidations as SOL’s price briefly surpassed $65.
Crypto exchange Binance recorded the highest losses at $53.44 million, followed by OKX at $51 million.
The liquidations occurred as Bitcoin continued its rally, finding new resistance at $40,000 and strong support around $38,000. This suggests the potential for an altseason on the horizon.
wBTC Supply Decrease in November
In November, the supply of wrapped Bitcoin (wBTC) on Ethereum decreased by around 2% or more than 3,000 BTC. This indicates muted demand for BTC on the ETH blockchain despite its rising value.
The wBTC order book shows that more burning than minting occurred during the past month. Currently, there are 160,286 wBTC against 160,293 BTC held in custody.
The balance decline of wBTC could be attributed to decreased DeFi appetite and the emergence of BRC-20 on the blockchain network. Demand for wBTC was high when DeFi activities were thriving, but it has waned as several DeFi protocols struggle to reach previous heights.
Hot Take: wBTC Demand Declines as DeFi Appetite Falters
The decrease in wrapped Bitcoin (wBTC) supply on Ethereum suggests that demand has decreased alongside the decline in DeFi activity. As DeFi protocols struggle to regain their previous heights, investors have found less use for wBTC. This indicates a shift in market sentiment and highlights the importance of monitoring the evolving trends within the crypto industry. While Bitcoin’s price surge may have left short sellers with significant losses, it is crucial to consider other factors such as wBTC supply and demand dynamics when assessing the overall health and potential of the market.
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