Massive Bitcoin surge to $100K results in $970 million liquidation cascade
Hop on the Crypto Rollercoaster: Bitcoin's Dramatic Rebound
- Disclaimer: Investing in cryptocurrencies involves risk. Always do your own research before making any investment decisions.
Crypto Markets: Beware of Green Signals
In the thrilling world of cryptocurrencies, a spark of green usually spells trouble for short-sellers – and Bitcoin's [BTC] stunning comeback to $100k was no exception.
Last week, short-sellers met their match, as a fierce short squeeze took down $970 million worth of leveraged positions in one fell swoop. Here’s how it went down.
Shorts vs Longs: The Ultimate Showdown
On May 2nd, Bitcoin soared to test the $98k ceiling, but the breakout lacked conviction. The bulls' momentum fizzled out, and the bears pounced with a vengeance. With shorts making up 63.64% of all Bitcoin futures positions on Binance, the bearish bets looked promising.
The ensuing short squeeze hit hard: open interest drained, longs took a beating, and Bitcoin slid back to $94k in just 48 hours. But guess who got the last laugh?
Fast forward a week, and the tables had turned. A massive $970 million in liquidations marked a widespread rebound, with the funding rate (FR) spiking green for an extended period.
Source: CryptoQuant
It seems traders are still betting on a BTC bull run, with long positions commanding 51.64% dominance across all exchanges. The 4-hour order book exudes a distinctly bullish vibe.
But the bears aren’t ready to throw in the towel just yet. On Binance, 60% of accounts are still positioned short, hoping for a price rejection near the $103k resistance zone. Are we setting up for another episode of musical chairs—or is Bitcoin about to spring a trap?
Unleashing the Bear Trap?
Cracks in the foundation are becoming evident. While Bitcoin rebounded to $104k in a flash, futures traders are already casing the exits, unloading leverage and offloading profits at a steady pace.
However, there’s no major sign of distributed selling— yet. On-chain data shows HODLers remain steadfast, awaiting opportunities to buy at lower prices. Could this wave of derivatives-fueled selling pressure just be a minor blip on the radar?
If Bitcoin keeps clawing its way higher, this bear trap might just get sprung. The $970 million in liquidations? That could just be the appetizer.
Source: Coinglass
Maps of liquidity highlight a cluster around $103,685, with $49.64 million in stacked leveraged positions. If the bears underestimate the bulls, we could see Bitcoin breakout towards $105k.
To Inflows and Beyond
Over the past month, Bitcoin's Realized Capitalization surged by nearly $30 billion, signaling renewed interest from investors, and a bullish outlook for Bitcoin. This growth, averaging around 3% per month, suggests increased buying activity and trader confidence, though it falls short of the peak accumulation periods.
According to some experts, prices could reach between $120,000 and $200,000 by the end of 2025 if market sentiment remains favorable and macroeconomic conditions cooperate. However, the historical tendency for market slowdowns during the summer months may temper gains, so investors should exercise caution.
Ultimately, the true test lies in how broader economic conditions evolve, including potential interest rate adjustments and GDP growth. Renewed institutional interest and continued interest from retail investors will play critical roles in determining whether Bitcoin continues its upward trajectory.
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- The crypto market's recent surge, as depicted by Bitcoin's [BTC] rebound to $100k, is a testament to the excitement and risk that comes with investing in cryptocurrencies.
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- Finance professionals and investors are closely watching the crypto market, with some predicting prices could reach between $120,000 and $200,000 by the end of 2025.
- Short-sellers were caught off guard when Bitcoin experienced a short squeeze, leading to $970 million in liquidations and a widespread rebound.
