If Bitcoin Drops Below $94,000, Mainstream CEX's Aggregated Long Liquidation Volume Will Reach $1.556 Billion

Bitcoin’s price movement continues to trigger large-scale liquidation risks on centralized exchanges. If BTC falls below $96,562, major CEXs could see $16.13 billion in long liquidations, according to ChainCatcher data. Conversely, a break above $95,933 could result in $14.78 billion in short liquidations according to the same analysis. The threshold at $94,000 is now a key level to watch for long liquidation risk.

Market sentiment remains mixed as institutional buying drives price gains. Bitcoin recently rose above $97,000 after $1.25 billion in net inflows into MicroStrategy’s BTC purchases and $753 million in ETF inflows according to market data. The price has gained nearly 7% in two days, reaching a three-month high. However, short liquidations have surged to $360 million in the last 24 hours, the largest since October's leveraged selloff.

A decline in the number of BTC holders has also preceded price gains. Santiment data shows a 47,244 drop in BTC wallet addresses in two months according to on-chain analysis. This trend has historically aligned with upward price movements, suggesting possible further strength. At the same time, the supply of BTC on exchanges has reached a seven-month low of 1.18 million.

Why Did This Happen?

The recent price rally aligns with strong institutional demand. Bitcoin’s price has closely followed net institutional demand over the past year. This includes large purchases by firms like MicroStrategy and inflows into spot BTC ETFs. On January 13, the top nine ETFs recorded $753 million in inflows, with Fidelity’s FBTC leading the way according to ETF data.

Whale activity is also a key factor. A notable whale increased its BTC long position with a 40x leveraged trade, entering at $95,224.9 with 333 BTC according to blockchain data. Another whale, previously known for selling BTC to open short positions, has now flipped to long positions, holding $109.5 million in BTC according to analysis.

How Did Markets React?

Bitcoin’s price has moved above $95,000, maintaining gains following a sharp increase from $91,296 to $96,495 according to price tracking. The MACD indicator remains in a buy signal, suggesting bullish momentum could continue. A close above the 100-day EMA at $95,987 would confirm the short-term bullish outlook.

However, the market is not without risk. A whale holding a long position in BTC, ETH, and SOL has seen unrealized gains shrink to $51 million, despite holding over $470 million in total assets according to on-chain monitoring. Meanwhile, a large whale has incurred over $6.6 million in losses from funding fees on its long positions according to transaction data.

Exchange inflows and retail behavior are also critical. Santiment reports that retail investors are reassessing positions after the recent rally, while large holders are accumulating according to market analysis. This divergence has historically increased the likelihood of a bullish trend. Smaller wallets are selling, while those holding 10 to 10,000 BTC are buying more according to on-chain data.

What Are Analysts Watching Next?

Investors should monitor key price levels and on-chain metrics. If Bitcoin drops below $94,000, long liquidations could reach $1.556 billion according to risk assessment. This threshold is a critical test for market stability and investor confidence. Additionally, a close above the 100-day EMA would be a technical confirmation of further strength.

Whale behavior is another key focus. Some whales are moving from short to long positions, while others are closing losing trades according to whale tracking. This shift may indicate growing confidence in Bitcoin’s near-term prospects. However, the presence of leveraged long positions also introduces risk, especially if the price drops unexpectedly according to risk analysis.

Retail investors are advised to proceed cautiously. While the current divergence between retail and whale activity is bullish, it does not guarantee a continued rise. Santiment suggests that favorable probabilities exist, but outcomes depend on how long the pattern persists according to market research. Retail investors should focus on risk management and avoid overexposure to leveraged positions.

Analysts also highlight the importance of macroeconomic conditions. A shift in interest rates or a strong U.S. dollar can affect Bitcoin’s price direction according to market analysis. As institutional buying continues, a reversal in ETF flows could signal a weakening bull market. Investors should track net inflows and outflows to gauging institutional sentiment.