Bitcoin News Today: Bitcoin Nears $125K as $16.41B Short Liquidation Risk Looms

Bitcoin’s short liquidation leverage has surged to $16.41 billion, with the $125,000 price level identified as a critical threshold that could trigger widespread short squeezes [1]. This level is marked by a dense cluster of leveraged short positions, which are now at high risk of being liquidated as the price continues to inch upward [1]. Current price activity is concentrated near the $116,424 level, where $803.19 million in liquidations have already occurred [1].

The Bitcoin Exchange Liquidation Map highlights the distribution of leveraged bets across major trading platforms. Bybit leads with $40.42 million in short liquidation exposure, followed by Binance at $18.78 million and OKX at $1.23 million [1]. This concentration of short positions across exchanges reflects a broader market trend of aggressive bearish positioning, which, if invalidated by a sustained BTC rally, could result in cascading liquidations and rapid price acceleration [1].

The risk is further amplified by the historical pattern of liquidation-driven price surges. When short positions are forced to cover due to price breaks above key resistance levels, the resulting buying pressure can push prices upward in a self-reinforcing cycle [1]. The $111,000 to $125,000 range shows a steep rise in short liquidation leverage, suggesting that traders have been aggressively betting on a downside reversal that has not materialized [1]. Instead, long liquidation leverage has fallen sharply, dropping from over $400 million to approximately $410,000 in recent sessions [1]. This divergence suggests a shift in market sentiment, with bulls gaining a stronger position as sellers of longs reduce their exposure [1].

The cumulative liquidation leverage curve has climbed to over $16.34 billion, emphasizing the size of the exposure tied to short positions [1]. At the same time, the $125,113 price level is particularly sensitive due to its high concentration of short leverage. If Bitcoin breaches this threshold, it could trigger a large-scale short squeeze, potentially leading to a multi-thousand-dollar price move within a short period [1].

The question now is whether Bitcoin’s current bullish momentum can continue to force the largest short squeeze of the year [1]. Analysts have pointed to similar patterns in the past, where concentrated short positions led to sharp price reversals when bearish assumptions were invalidated [1].

Source: [1] Bitcoin $16.41B Liquidation Risk at $125K Price Zone (https://cryptonewsland.com/bitcoin-16-41b-liquidation-risk-at-125k/)