Bitcoin Hits $111,999 All-Time High Amid Short-Term Pullback Fears

Bitcoin (BTC) reached a new all-time high (ATH) yesterday, climbing to $111,999 on a major exchange before dipping slightly to around $110,000 at the time of writing. While the broader trend remains bullish, some analysts now anticipate a short-term pullback. According to a recent analysis, early warning signs suggest that BTC may face a brief correction. The analyst noted that if momentum doesn’t pick up soon, Bitcoin could struggle to maintain its bullish trajectory.

Taker buy/sell volume on the exchange has shown a noticeable spike in aggressive buy orders – usually a bullish signal – but sell volume has also risen in tandem, effectively absorbing most of the demand. Despite this uptick in buy volume, BTC’s price has not responded proportionally, suggesting distribution or selling pressure. For the uninitiated, taker buy/sell volume measures the amount of aggressive buying versus selling on the exchange using market orders. A higher taker buy volume indicates strong buyer interest, while higher taker sell volume signals stronger selling pressure.

In addition, open interest on the exchange has surged during the recent price rally, signalling an influx of leveraged positions. While rising open interest can support further gains, the subdued price reaction raises concerns about Bitcoin’s short-term strength. Meanwhile, funding rates have stayed mostly neutral throughout the rally. However, the most recent push to a new ATH saw BTC’s funding rates turn slightly positive, hinting at increasing long exposure and renewed bullish sentiment.

The breakout also triggered significant short liquidations, likely fuelling a short squeeze. Data shows that over the past 24 hours, $521 million in positions were liquidated – $448 million of which were shorts. Concluding, the analysis noted that despite the emerging signs of caution, Bitcoin’s overall bullish structure remains intact. However, the market is now seeing the early signs of a potential short-term pullback, especially due to the spike-driven nature of the move.

Other analysts share a similar outlook for BTC. For example, a crypto analyst suggested that the current price action may be a deceptive move designed to trap bullish traders – potentially pushing BTC down to $97,000 before the final rally begins. That said, the recent weakness observed in the US Dollar Index (DXY) has fuelled hopes for a capital reallocation to alternative assets, including BTC. At press time, BTC trades at $110,885, up 1.1% in the past 24 hours.