Bitcoin (BTC) reached the resistance level of $72,000 within its 3-month price range but quickly pulled back to $67,000. This price movement brought uncertainties in the derivatives market. Today, there is a shift towards short sellers in Bitcoin, which could indicate an upcoming short squeeze.
Bitcoin Dollar Chart
Since the end of February, BTC has traded between $60,000 and $72,000. In the event of potential breakouts, the price could move to the all-time high of $73,805 or drop to $56,537.
On May 21, 2024, Bitcoin nearly reached $72,000 again, but due to short sellers, the formation changed. As a result, BTC moved within the range and fell 6.4% to $67,315.
Important Bitcoin Levels
However, as Bitcoin futures and leveraged trading accumulate liquidity upwards, these activities could target short sellers. These liquidity pools could also be targets for cautious investors. Consequently, BTC might face a short-term short squeeze in the coming days.
Additionally, data from CoinGlass reflects important points about the current state of the derivatives market.
Notably, over $1.2 billion in liquidation has accumulated at the $72,000 resistance level. Market makers and traders could target this area as a cash flow opportunity.
This situation could lead to the liquidation of short positions, creating an artificial demand environment. This demand could push Bitcoin’s price above its all-time high, resulting in a short squeeze.
However, it is important to remember that crypto investors evaluate their positions based on market changes. If traders close their short positions, the notable liquidation levels could disappear.
How Much is One Bitcoin?
Renowned crypto analyst Ali Martinez examined the potential for a short squeeze. He highlighted the rise in whale activities. According to Martinez, these whales purchased 20,000 BTC worth $1.34 billion, and the price fell to $67,000 during this period.
As of the time of writing, BTC continues to trade at $68,900 after a 2.42% rise in the last 24 hours.
