Bitcoin Surges Towards $99K: Short Liquidations and Whale Activity Drive Optimism

Bitcoin has surged, hitting nearly $99,400, driven by positive market sentiment and notable short liquidations. Over 84% of liquidations come from short positions, indicating bullish trader optimism. Inflows into Bitcoin ETFs are enhancing market confidence, with analysts suggesting a potential breach of the all-time high if support levels hold.

Bitcoin has crossed the remarkable threshold of $99,000, hitting a peak of $99,406 — the highest since early February. This significant milestone comes amid a rally in the broader cryptocurrency market, with the global crypto market capitalisation climbing by 2.7% in the last day to $3.06 trillion. Daily trading volumes also saw a notable spike, increasing by 25% to hit $104.3 billion.

A surge in short liquidations has rattled the market, with over 84% of the $300 million in total cryptocurrency liquidations attributed to traders betting against Bitcoin. Specifically, Bitcoin accounted for about $114.5 million in liquidations, with a staggering $96.2 million coming from short positions. According to data from CoinGlass, a single short liquidation worth $10.6 million marked the largest transaction over the past 24 hours.

Market trends indicate that the price rise follows a steady outlook from the US Federal Reserve, which announced it plans to maintain interest rates within the range of 4.25% to 4.50%. This news spurred optimism, driving the bullish sentiment in the markets in the aftermath of the FOMC meeting on May 7, leading to a 0.43% increase in the S&P 500 index.

Notably, as Bitcoin’s value began to rise, a previously inactive whale made a return to the market by purchasing 100 BTC for a total of $9.78 million. This whale had sold similar BTC holdings just four months prior for a price of $101,874 each. Their re-entry at a lower price during this upswing reflects growing confidence amongst large investors in Bitcoin.

Analysts suggest that increased whale accumulation could buoy Bitcoin’s price further, as expectations of significant sell-offs seem absent. Moreover, positive momentum is bolstered by net inflows of $142 million into US-based spot Bitcoin exchange-traded funds (ETFs), enhancing market sentiment around the cryptocurrency.

Some experts from Bitfinex predict that should the support around $95,000 hold, Bitcoin could potentially break its all-time high of $109,000. This builds an interesting but cautious bullish case for the digital asset moving forward.

However, a disclaimer is necessary: while this coverage aims for accuracy and timeliness, it should not be considered as financial advice. Given that market conditions are highly volatile, investors are urged to do their own research and seek professional guidance before making investment decisions.