“Now could be a nasty time to take paper bets on BTC,” mentioned technical analyst Willy Woo on June 2.
He mentioned it was “open season on liquidation hunts as a result of excessive ranges of betting,” earlier than including that Bitcoin was “ready to purge the bets earlier than the following swing of all-time-highs.”
Paper bets are usually crypto derivatives resembling futures, options, and perpetual contracts that permit speculators to guess on the value route with out ever holding the asset. Woo mentioned spot Bitcoin costs are exhausting to maneuver up with too many of those “on line casino hitchhikers” onboard.
NOW is a BAD TIME to take paper bets on BTC.
It’s open season on liquidation hunts as a result of excessive ranges of betting.
BTC is ready to purge the bets earlier than the following swing of all-time-highs.
Chart: paper bets on BTC, exhausting to maneuver up with too many on line casino hitchhikers onboard. pic.twitter.com/bj9ikjdn8Q
— Willy Woo (@woonomic) June 2, 2025
Leverage Flush Imminent
Most derivatives gamblers use leveraged buying and selling, which tends to overheat markets and create extra volatility, particularly once they get liquidated.
When requested concerning the $100 million liquidation of Hyperliquid whale dealer James Wynn final week, Woo defined that the shopping for strain was low final week, which implies “whales can push issues round.”
“In impartial environments, it’s straightforward to maneuver value, particularly weekends and summer time months,” he mentioned earlier than warning:
“Now add incentives to make cash by means of liquidations, it’s the right setup for liquidation hunts NOW.”
Bitcoin open curiosity (OI), or the variety of open futures contracts which have but to be settled, hit an all-time excessive of $80 billion on Could 23, according to Coinglass. It has since fallen to $72 billion however stays elevated, indicating a excessive stage of “paper bets” or leverage out there.
When OI surges, it signifies that large leveraged positions have constructed up with numerous speculators holding massive positions with borrowed cash.
When the spot value of BTC strikes in opposition to these over-leveraged positions, merchants get forcibly liquidated. These flushouts can create a cascade impact and amplify promoting strain, which might trigger a pointy decline in costs and volatility spikes.
BTC Worth Outlook
Bitcoin prices are up marginally on the day, hitting an intraday excessive of $106,450 earlier than retreating to round $105,350 throughout Tuesday morning buying and selling in Asia.
Since falling from its Could 22 all-time excessive, the asset has remained in consolidation round present ranges for the previous few days. It appears very robust on the long-term view, however may see extra volatility if Woo’s “on line casino hitchhikers” get liquidated.
In the meantime, the M2 cash provide has simply hit an all-time excessive, which is sweet information for risk-on belongings resembling crypto.
M2 Cash Provide hits new all-time excessive of $21.86 Trillion pic.twitter.com/YoFxMlRqjY
— Barchart (@Barchart) June 3, 2025
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