Bitcoin Holds $105,500 as Traders Eye 10% Upside for Short Squeeze

Bitcoin (BTC) is currently holding at $105,500 as of the June 8 weekly close, with traders anticipating a potential end to the recent price correction. The cryptocurrency has shown signs of a rebound after dipping to $100,500 on June 5, which has encouraged traders to place bets on further upside movement and a resumption of the bull run.

Analysts are closely monitoring the liquidity conditions, which suggest that a significant short squeeze could be on the horizon. According to trader Cas Abbe, if Bitcoin's price increases by 10%, it could liquidate $15.11 billion in short positions. Conversely, a 10% downside move would liquidate $9.58 billion in long positions. This analysis indicates that the market is currently heavily shorted, which could lead to a substantial price movement if the trend reverses.

Rekt Capital, a popular trader and analyst, noted that Bitcoin is showing signs of breaking its two-week downtrend on the daily timeframe. He highlighted that a daily close and retest above $106,600 would be favorable for trend continuation. Additionally, SuperBro, another trader, pointed out that Bitcoin needs to reclaim its 10-day simple moving average (SMA) and the head and shoulders neckline on a closing basis to invalidate the bear case.

CrypNuevo, another prominent trader, identified $100,000 as a key psychological support level. He suggested that this area is ideal for building long positions, with easy invalidation below it. This view aligns with the broader market sentiment that $100,000 remains a significant support level, and a successful retest of this level could pave the way for further price appreciation.

Rekt Capital also described the support retest after May’s all-time highs on weekly timeframes as "successful." He questioned whether Bitcoin could confirm this retest with a weekly close above $104,400 for the fourth consecutive week. This level is crucial as it would provide further validation of the bullish trend and potentially attract more buyers to the market.

In summary, the current market conditions suggest that Bitcoin is poised for a significant price movement, with liquidity analysis favoring a short squeeze. Traders are closely monitoring key support levels and technical indicators to gauge the direction of the market. The successful retest of support levels and the potential for a weekly close above $104,400 could provide further bullish momentum, while a failure to hold these levels could lead to increased volatility and potential downside risk.