BTC Liquidation Data Can Push Prices to New Heights: Analyst

Bitcoin’s (BTCThe first week in January saw a sharp 7,4% rise, which has now shifted the focus of the markets back on futures positions. Liquidation data indicates that the pricing action could be asymmetric.

The key takeaways

• Below $84,000 are over $10.6 Billion in liquidations of long positions, and just 2 billion dollars in liquidations of short positions above $104,000.

• Hyperliquid’s retail positioning shows that shorts are vulnerable to upward pressures more than longs.

• Bitcoin has to recover the $100,000 price basis in order for a trend change to be confirmed.

BTC volatility is a result of a liquidation imbalance

Data from CoinGlassIn the event that Bitcoin returns to $84,000, it would liquidate approximately $10.65billion in leveraged positions. While only $2 billion of short positions would be liquidated if BTC rose to $104,000, the leveraged long position is expected to reach approximately 10.65 billion dollars.

The imbalance is important because it can lead to forced orders on the market. The move to the downside, towards $84,000 could result in long liquidations that would increase pressure on prices. If you are short, there will be less pressure on the market if your position does not change quickly.

Hyperliquid is a different story. ChimpZoo is a cryptocurrency trader. highlighted Retail traders are disproportionately long, as a rally can liquidate 6,000 BTC in retail shorts compared to only 2,000 BTC for retail longs during a comparable downside movement. 

Setup calls “absurd,” The trader claimed that a similar position could quickly propel Bitcoin’s price to new heights. Closer inspection of the data showed a much more balanced profile. Although the exchange continues to show a net-short bias, liquidity exposure for a $10,000 change in price is largely symmetrical. 

A move of this magnitude would result in approximately 3,860BTC being liquidated in long-term positions. This compares to roughly 4,100BTC for short-term positions in an uptrend.

Related: Is Venezuela hiding a 600K Bitcoin reserve? Analysts remain unsure

$100 remains the crucial structural level

Despite liquidation-driven momentum, Analyst Crypto Dan cautioned It is highly unlikely that Bitcoin will move in a straight line to new highs. To confirm the trend change, Bitcoin first needs to regain its cost of holding for six-to-12 months.

This level stands currently at around $100,000. If it is sustained above that level, this would indicate a return to bullish structure in the market and allow for more upside. A rejection would indicate that the overall downtrend is still intact, despite initial gains.

Technically, there are also short-term risks below the current price. Bitcoin might retest CME gap formed last weekend between $90 600 and $91,600. A second unfilled CME gap is located lower on the chart, between $88,170 – $88,700.

As the month continues, these potential gaps will be re-introduced if BTC fails to reject resistances of around $96,000. 

Related: Bitcoin enters ‘strength’ phase, but $100K debate heats up between traders

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