Observers caution of an imminent leverage wipeout as Bitcoin exits ‘easy mode’.

Traders who have leveraged positions in Bitcoin (BTC) may be in for an unpleasant surprise as the cryptocurrency reaches a crucial point that could result in price fluctuations in different directions, according to analysts. A pseudonymous crypto trader known as HoneyBadger stated that there is currently too much leverage in the market, allowing market makers to take advantage of high emotions and risky behavior. Data from CoinGlass reveals that $39 million worth of leveraged positions in Bitcoin were liquidated in the past 24 hours, with $18.38 million in long positions and $20.62 million in short positions. HoneyBadger pointed out that the Bitcoin price chart is forming a symmetrical triangle, indicating a neutral pattern rather than a bullish ascending or bearish descending triangle that traders could use to make better predictions about its direction. HoneyBadger warns that traders may misinterpret the pattern and prematurely enter long positions, only to be caught off guard by a fakeout where the price briefly moves out of the pattern before quickly retracting. On the other hand, Andrew Kang, co-founder of Mechanism Capital, is more optimistic and believes that the upward trend will continue after the Bitcoin halving on April 20, with the price potentially reaching $80,000 by May. Bitcoin is currently trading at $70,500, having tested its support level of $68,500 multiple times in the past week. However, the increase in leveraged positions in recent days suggests that a similar 5% drop in price would have a much greater impact on long positions. If Bitcoin’s price increases by 5% to $73,819, around $2.14 billion in short positions would be liquidated. Conversely, if the price drops by 5% to $66,671, approximately $1.63 billion worth of long positions would be liquidated. HoneyBadger and other traders recommend caution and staying on the sidelines due to volatility, as well as not getting caught up in leveraged positions that could lead to losses.