Bitcoin News Today: Bitcoin Near $120,000 Triggers $18 Billion Short Liquidation Risk

Bitcoin is currently at the center of a potential short squeeze scenario, with nearly $18 billion in leveraged short positions at risk of liquidation if the price approaches $120,000. According to data from CoinGlass collected on August 7, the heatmap of leveraged short positions indicates a critical liquidation zone just above that level [1]. The data suggests that if Bitcoin continues its upward trajectory, a chain reaction of forced liquidations could push the price even higher.

The liquidation map reveals a sharp increase in the concentration of short positions just beyond the $119,000 threshold. This concentration implies that a price breakout could trigger a cascade of buy orders as traders attempt to cover their short positions, further intensifying upward price pressure. In such scenarios, exchanges forcibly liquidate losing positions, which in turn can stimulate additional buying demand and reinforce the upward momentum [1].

On August 7, Bitcoin rose 2.15% in the past 24 hours, recovering from a week-long decline of 1.35%. This bounce was partly attributed to a new executive order from U.S. President Donald Trump, which allowed cryptocurrencies to be included in 401(k) retirement plans. The regulatory shift has been interpreted as a positive signal for the broader cryptocurrency market [1]. Simultaneously, spot Bitcoin ETFs in the U.S. attracted new inflows, with BlackRock's product recording a net gain of $41.9 million after several days of outflows, suggesting renewed institutional interest [1].

While favorable regulatory developments and increased institutional demand present a bullish outlook, the key question remains whether the current rally is strong enough to break through the critical resistance levels required to trigger large-scale short liquidations. If Bitcoin can sustain its momentum and close above the $120,000 threshold, the risk of a self-reinforcing upward spiral increases significantly.

Source: [1] Monster short squeeze alert for Bitcoin worth $18 billion (https://finbold.com/monster-short-squeeze-alert-for-bitcoin-worth-18-billion/)