Bitcoin News Today: Bitcoin Near $120K Triggers $2.3 Billion Short Liquidation Risk

A potential $2.3 billion liquidation event for Bitcoin short positions is looming if the price of BTC surges past $120,000, according to recent market analysis[1]. This threshold has become a focal point for traders and analysts, as it marks a critical resistance level that could trigger significant forced liquidations. The concentration of short positions around this level suggests that many bearish traders are positioned for a price decline, yet the prevailing market sentiment and historical price behavior indicate otherwise.

Bitcoin has been trading in a consolidation phase near $118,000 for several weeks following a previous all-time high of $123,000. Recent price fluctuations, including a dip to $116,000 earlier in the week, have failed to break the $118,000 psychological support, reinforcing the notion that the market remains resilient. Despite bearish sentiment amplified by short-term sell-offs—most notably a $107 million liquidation event from Galaxy Digital’s large BTC sale—the price has consistently rebounded, showing the market’s ability to absorb downward pressure[1].

The recent liquidation event involving 10,000 BTC from Galaxy Digital underscored the volatility in the market, as the move pushed the price to $115,000 before it recovered. Analysts have pointed out that while short-term corrections are expected, the broader trend remains bullish. The majority of seasoned analysts believe that the current bearish positioning is premature, and that the market is likely to continue its upward trajectory in the coming months[1].

If Bitcoin does break above $120,000, the resulting liquidation of $2.3 billion in short positions could create a self-reinforcing cycle of buying pressure, further driving the price higher. This dynamic is common in leveraged markets, where forced liquidations can amplify price movements. Such an event would not only mark a significant psychological milestone but also potentially set the stage for Bitcoin to reach new all-time highs in the $130,000 to $144,000 range[1].

The broader crypto market has already experienced heightened volatility, with $428 million in liquidations recorded over the past 24 hours. While these liquidations do not directly relate to Bitcoin short positions, they reflect the overall risk exposure and leverage levels within the market. As Bitcoin inches closer to $120,000, the risk of a large-scale liquidation event increases, with the potential to influence market psychology and momentum.

In summary, the current positioning of bearish traders in Bitcoin appears to be a high-risk bet, especially with the majority of market indicators suggesting further price appreciation. The coming days will be crucial in determining whether the price can break through the $120,000 level and trigger the anticipated $2.3 billion in short liquidations, reshaping the balance of power in the market.

Source:

[1] https://cryptonewsland.com/bitcoin-bears-could-get-liquidated/