Bitcoin Price Breakout: Potential $7B Short Squeeze Looms

Bitcoin’s price is currently around $84,500, with a potential breakout to $90,000 that could liquidate over $7 billion in short positions. Recent data shows a shift in trader sentiment towards bullishness despite ongoing concerns reflected in the Fear & Greed Index. Technical analysts suggest key support and entry points while large holders exhibit mixed trading behaviour. Analysts draw parallels between Bitcoin and gold’s price movements, suggesting a potential target of $155,000.

On April 17, Bitcoin (BTC) traded close to $84,500 as bullish momentum returned following last week’s volatility. The market anticipates a significant breakout at $90,000 that could lead to the liquidation of over $7 billion in short positions. BTC has risen 3.41% weekly and 0.53% in the last 24 hours, recovering from a dip to $80,000 earlier this month.

A change in trader sentiment accompanies Bitcoin’s recent upswing, with crypto analytics firm Santiment reporting a shift to “bullish territory” in social media activity on April 16. Their sentiment tracker increased to 1.973, indicating growing optimism among traders regarding Bitcoin potentially reclaiming the $90,000 mark. However, the Fear & Greed Index remains in “Fear” territory at 30/100, suggesting cautious optimism overall.

If Bitcoin breaches the $90,000 level, CoinGlass data indicates it may lead to the liquidation of $7 billion in BTC short positions. Coinvo’s recent post emphasised this potential event, warning traders about the risks associated with shorts at this level. Market analyst Merlijn Trader noted the recent bounce off support and anticipated that maintaining a value above $86,000 could rally additional bullish momentum.

Technical analyst Castillo Trading highlighted long entry zones between $75,000 and $82,000, citing historical volume nodes as crucial support. He indicated key naked points of control (nPOC) at $107,877, $104,802, $98,407, and $95,756 that could act as resistance if Bitcoin continues to rise. Entry points around $76,949 and $74,265 may also provide rebound opportunities during price corrections.

Mixed signals emerge from the behaviour of large holders. IntoTheBlock reported a 29.05% decrease in large holder inflows in the past week, indicating short-term selling pressure. In contrast, the longer-term perspective shows a significant accumulation of 465% in large holder inflows over the last 30 days, indicating sustained institutional interest. Notably, a recent unstaking incident from Babylon moved $1.26 billion in BTC, contributing to price volatility.

Amidst a year-to-date decline of 9.3% for Bitcoin, some analysts observe parallels between Bitcoin’s price movements and those of gold. Cryptollica suggested that BTC could follow gold’s breakout pattern, establishing a midterm target of $155,000. Glassnode affirmed this perspective in their “Week Onchain” report, noting both assets perform well during macroeconomic instability and that Bitcoin is well-positioned for recovery.

Bitcoin’s current trajectory remains uncertain, with the looming risk of $7 billion liquidations at the $90,000 mark and a resurgence of bullish sentiment. The outcomes of upcoming sessions could critically influence Bitcoin’s near-term direction, shaped by macroeconomic developments, whale activities, and overall risk sentiment in the market.