Dangers of Increasing Long Positions in Bitcoin and Possible Scenarios

Recently, there has been a significant increase in long positions opened in Bitcoin (BTC). This situation has reached alarming levels, reaching a rate of over 70%. Increasing long positions unfortunately pose a risk for Bitcoin and the stock market in the short term.

Why Does It Create a Risk?

Liquidity Problem: Opening too many long positions reduces liquidity in the market. This situation leads to sudden price fluctuations and the risk of not being able to find liquidity in case of sudden declines.

Manipulation Risk: Large investors may try to manipulate the market by using large long positions. This can lead to artificial price fluctuations that are independent of real price movements.

Liquidation Risk: Since long positions are opened using leverage, they may be liquidated quickly in case of price declines. This could lead to significant losses for investors and further reduce liquidity in the market.

Possible Scenarios

Scenario 1

Manipulation and Liquidation: Long positions can be liquidated by artificially pushing the Bitcoin price up through manipulations. This could lead to sharp price declines and investor losses.

Price Drop: Without the liquidation of long positions, the Bitcoin price may begin to fall in its natural course. In this case, long positions will continue to lose money and investors will lose their money.

Scenario 2

Closing Long Positions: Long position holders may start to close their positions due to concerns about decreases in prices. This may increase the selling pressure, causing the price to drop further.

Long-Term Uptrend: Despite the above risks, long positions may prove profitable if Bitcoin's long-term uptrend continues. But even in this scenario, short-term volatility and sudden price fluctuations pose risks to investors.