Bitcoin News Today: Bitcoin near $120K as 10% rise could trigger $18B short squeeze

Bitcoin’s recent price action has ignited renewed bullish sentiment among traders, who are eyeing a potential short squeeze and a return to all-time highs. The cryptocurrency hit a new August high of $118,760 on Bitstamp, pushing the market to a critical juncture where a modest 10% price increase could trigger over $18 billion in short liquidations [1]. This scenario, driven by heavily leveraged short positions, has traders and analysts closely watching for signs of a sharp upward breakout.

The potential for a short squeeze is gaining traction as key indicators align with bullish expectations. BitBull, a well-known trader, noted that a 10% upward move would not only erase substantial losses for short sellers but also inject significant buying pressure into the market. He suggested that while a short-term pullback is likely when traditional markets reopen on Monday, the longer-term outlook remains strong, with a move above $120,000 becoming increasingly plausible [1]. Rekt Capital, another prominent analyst, emphasized that Bitcoin is on the verge of reclaiming key support near $117,200, with the coming weekly close seen as a decisive moment for the market [1].

Historical comparisons further support the case for an extended rally. A chart shared by BitBull on X highlighted Bitcoin’s current price pattern as resembling past bull market breakouts, suggesting a sustained upward trajectory could follow [1]. Merlijn The Trader reinforced this view, warning short sellers that the largest liquidity pool in weeks is currently just above the price level, adding that those with short positions face significant risk [1].

The CME futures market also offers clues about potential price direction. A notable gap exists at $116,500, which traders like Ted Pillows believe will likely be filled in the near future. “BTC dropped $2K to fill last week’s CME Gap. After that, Bitcoin could rally towards a new ATH,” he stated [1]. The closure of this gap may serve as a catalyst for further upward movement, potentially setting the stage for a new all-time high.

While some traders remain cautious about the choppy weekend price action, the broader market sentiment is decidedly bullish. Daan Crypto Trades observed that Bitcoin may cede the spotlight in the short term to other assets like Ethereum, which has hit multiyear highs. However, he expects Bitcoin to reclaim dominance once it crosses $120,000 and approaches its historical peak [1].

The growing speculation around a potential short squeeze and a push toward $120,000 reflects the high leverage and volatility currently present in the market. As Bitcoin’s price continues to test key levels, the coming week is expected to provide clarity on whether the upward momentum can be sustained.

Source: [1] Bitcoin can liquidate $18B with 10% price gain as traders see $120K next (https://coinmarketcap.com/community/articles/6898a4af9af91a539f438888/)