Analysis suggests that a massive liquidation of up to $3 billion (approximately 4 trillion won) is imminent in the Bitcoin (BTC) market. This raises the possibility that a short-term bull market could emerge if the BTC price breaks through a specific resistance level.
According to the liquidation map released by cryptocurrency data platform CoinGlass, a large number of short positions are currently concentrated around $112,600. This is slightly higher than the current price of around $109,200, and if BTC breaks through this level, a strong "short squeeze" could occur. A short squeeze occurs when short sellers rush to buy to avoid losses, further driving up the price.
From a technical perspective, Bitcoin appears poised to enter a significant inflection point in the coming days. Currently, BTC is hovering just below the $112,000-$114,000 range, where the 100- and 200-day moving averages are located. If it breaks above this range, a sharp influx of liquidation liquidity is expected, leading to a strong rebound to $115,000-$118,000 in the short term.
Leveraged short positions can also trigger liquidations. The liquidation heatmap shows a high concentration of short positions in this area, suggesting a potential liquidity gap as the liquidation heatmap moves upward. Such a liquidity gap can trigger a surge in prices.
However, there are also downside risks. If BTC breaks below the current support level of $108,000, a short-term correction could lead to a drop to $106,000 or $102,000. The relative strength index (RSI) currently remains neutral at 45, indicating that the market's direction is still unclear.
In the medium to long term, while long-term holders continue to accumulate steadily based on on-chain data, excessive leverage continues to be used in derivatives markets. This means that significant volatility is likely to ensue in either direction.
In short, a break above the $112,600 level could trigger the liquidation of up to $3 billion (approximately 4 trillion won) worth of short positions in the Bitcoin market. If this resistance level breaks in the near future, it could lead to a short-term rally and serve as a key reversal signal.
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