The recent surge in upside liquidity appears to suggest that Bitcoin (BTC) might be up for another monster short squeeze.
At the time of writing, the cryptocurrency is trading at over $113,934, with nearly $16 billion in leveraged short positions across Binance, Bybit, and OKX exposed, according to the latest data from CoinGlass retrieved on September 11.
That is, the liquidation heatmap reveals a dense short liquidation zone above more or less $115,000, as well as long liquidations building around $112,000.
The chart below highlights the areas with the highest concentration of leveraged positions, the rising green curve on the right indicating the short liquidation leverage and showing where traders are most likely to be wiped out.
As the data over the last 30 days visible on the chart suggests, if Bitcoin’s price continues to climb above the current level, shorts could be forced to unwind rapidly in the $115,000 zone, triggering a short squeeze, trapping late short sellers, and likely driving the price even higher.
In other words, if bulls manage to keep control and drive BTC through resistance, the liquidation pressure could fuel a sharp parabolic run. This setup suggests that Bitcoin is at a critical juncture, with volatility potentially increasing soon.
Bitcoin price movements
Bitcoin managed to climb back over $114,000 on Thursday morning, lifted largely by fresh inflows into spot exchange-traded funds (ETFs).
Indeed, spot Bitcoin ETFs attracted $757 million in net inflows on September 10, marking a third consecutive day of gains.
What’s more, the rally followed Wednesday’s U.S. Producer Price Index (PPI) reports, which showed that wholesale inflation had slowed to 2.6% year-on-year.
The broader crypto market accordingly felt a slight boost, its total capitalization rising 1.5% to $3.97 trillion from $3.85 trillion the day before, according to CoinMarketCap.
What’s more, Bitcoin futures open interest also saw a modest gain of 0.75%, climbing to $83.72 billion as per CoinGlass data, while futures trading volumes rose to roughly $53 billion, highlighting institutional and retail participation.
Featured image via Shutterstock
