Bitcoin is facing a major short squeeze around the $112,000 price level, according to the latest statistics from analytics website Coinglass. The largest cryptocurrency by market capitalization is currently trading around $92k, down from a major price drop earlier this month. The sudden price tank liquidated billions of dollars in longs and pushed the index close to $80k at one point. Even with the recovery above $90k, the bulls remain uncertain for the time being.
2nd Largest Liquidation in History?
Bears are currently emboldened at this point, and the derivative traders have collectively placed a massive $15 billion bet around the $112,000 resistance level, even as the premier digital asset was hovering well above this level, hardly a few weeks ago. Here is the liquidation heatmap from Coinglass:
Image Source: CoinglassAccording to the liquidation heatmap, Bitcoin is facing major liquidations below the $112,000 price level, totalling a whopping $15 billion overall. Suppose the cryptocurrency manages to make such a bold move above. In that case, the liquidation frenzy will be the second largest in history, falling just short of the $19 billion one recorded on the 11th of this month:
Image Source: CoinglassAccording to a popular crypto analyst on X, Ash Crypto:
“Over $15 billion worth of short positions will get liquidated if Bitcoin hits $112,000.
This could be a massive short squeeze.”
Another X user agreed with this take and replied:
“The 112,000 Bitcoin price signals a huge liquidation risk! 15 billion dollars worth of short positions could be wiped out, potentially triggering a short squeeze. This phenomenon pushes the price further due to forced buying pressure, starting a self-reinforcing chain reaction. Essentially, the short sellers could provide the fuel for a fast and dramatic price increase. This market tension is worth watching”
The Future
Bitcoin’s recent long squeeze has cast a bearish spell on the market, so much so that the short sellers have placed massive bets against a major price uptick. According to some analysts, the bull market has ended; therefore, it is doubtful that the top digital currency will convincingly recover above the $100k resistance in the near future, let alone move above $110k.
This overconfidence from the bears could be the undoing, as $112,000 is within the realms of possibility right now, even with the bearish juggernaut marking its territory. A 22% price appreciation can liquidate $15 billion worth of shorts, and that is quite tempting for the bulls on its own.
However, Bitcoin could reach $98,000 and still maintain a bearish trend. Actual amounts depend on open interest and market dynamics, so the upward forces still face a long road ahead.
Source: https://zycrypto.com/15-billion-short-positions-to-liquidate-if-bitcoin-recovers-to-112000/
