Bitcoin Nears Record Monthly Close Amid Bull Market Surge

Bitcoin (BTC) is on the cusp of a significant milestone, with the potential to set its highest monthly close in history. If the price closes above $102,400 by the end of the month, it would mark a new record, underscoring the rapid pace of the ongoing bull market. This achievement comes on the heels of a record weekly close of $106,407 on May 18, indicating a strong upward trend.

Bitcoin is currently in a phase where it is nearing a 'price discovery' period. This term refers to the process where buyers and sellers interact to determine the market price of an asset in an undefined or non-traded range. A break above Bitcoin's all-time high of $110,000 would initiate this price discovery phase, driving BTC into an uncharted trading range with successive higher highs until a new equilibrium between supply and demand is established.

According to a crypto trader, the current market trend suggests that Bitcoin is inches away from this price discovery period. This phase is crucial as it could lead to significant price movements, potentially vaporizing over $3 billion in short positions if the price moves above $107,000. This scenario creates a "liquidation magnet" that could send BTC prices to new highs.

Historically, a 'golden cross' on Bitcoin's daily chart has preceded substantial price rallies, ranging from 45% to 60%. The current market conditions suggest a high probability of BTC hitting new highs this month, coinciding with the potential for a golden cross. A monthly close near $110,000 would mark a 15% to 17% gain for Bitcoin in May, its strongest May performance since 2019, significantly surpassing the historical average monthly return of 8% for the month.

Bitcoin researcher Axel Adler Jr. has identified a key technical pattern in Bitcoin’s current bull cycle, noting three recent instances of "compression"—a period of tightening price ranges—measured by rolling maximum/minimum over 180 days. This compression often signals an impending breakout, with historical precedent set by the 2017 rally when Bitcoin surged to $20,000 from $1,000. The current compression phase mirrors the 2017 cycle, where Bitcoin halving events and supply shocks fueled retail FOMO, driving major price rallies.

From the perspective of Bitcoin liquidation, over $3 billion in short leveraged positions are at risk of being liquidated if the BTC price moves from $105,000 to $110,000. In contrast, it would take a drop to $94,612 to trigger a similar amount in long liquidations. This skew suggests a higher probability of the price pushing upward to chase liquidity on the sell-side rather than dropping lower. Technical analyst Gert van Lagen noted a similar outlook, stating, "A liquidation magnet is glowing above $107K, ready to vaporize billions in shorts. First, BTC soared on fear. Next, it'll rise on liquidations."