Bitcoin (BTC) made a strong push towards the $72,000 resistance level, but ultimately retraced back to $67,000, creating uncertainty in the derivatives market. This recent price movement has sparked a shift towards short sellers in Bitcoin, which could potentially lead to a short squeeze in the near future.
The BTC price has been trading between $60,000 and $72,000 since the end of February. In the event of any potential breakouts, the price could reach its all-time high of $73,805 or drop to $56,537.
On May 21, 2024, Bitcoin came close to reaching $72,000 again, but due to the presence of short sellers, the market dynamics changed. As a result, BTC remained within its range and experienced a 6.4% drop to $67,315.
The accumulation of liquidity in Bitcoin futures and leveraged trading could potentially target short sellers and serve as a caution for investors. This could potentially lead to a short squeeze in the coming days.
CoinGlass data highlights important points about the current state of the derivatives market. Notably, there has been over $1.2 billion in liquidation at the $72,000 resistance level. Market makers and traders may see this as an opportunity for cash flow.
This could result in the liquidation of short positions, creating an artificial demand environment. This increased demand could push Bitcoin’s price above its all-time high, triggering a short squeeze.
However, it’s important to keep in mind that the evaluation of crypto investments is based on market changes. If traders close their short positions, the notable liquidation levels may disappear.
Renowned crypto analyst Ali Martinez has examined the potential for a short squeeze and has noticed an increase in whale activities. These whales have purchased 20,000 BTC worth $1.34 billion, contributing to the price drop to $67,000 during this period.
As of now, BTC is trading at $68,900 after experiencing a 2.42% rise in the last 24 hours.
Please note that the information provided in this article does not constitute investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.