Bitcoin (BTC) is nearing $86,900, where over $600 million in short positions might trigger a major liquidation event. The current price is $83,950, requiring a 3.5% rise to reach this level. The overall trend shows a gradual recovery, but potential volatility is expected if the price approaches this target.
Bitcoin (BTC) is currently experiencing an increase in price, but there is significant selling pressure just above current levels. Analyst Ali Martinez has indicated that if BTC reaches $86,900, it could instigate a significant liquidation event, considering over $600 million in short positions are active at this price point.
The figure of $600 million is critical, as it reflects highly leveraged traders, many operating at 50x to 100x leverage, who risk severe losses. Specifically, the current total short liquidation leverage stands at $615.42 million, with $1.51 million at 50x and $7.36 million at 100x.
Presently, the price of BTC is approximately $83,950, necessitating a 3.5% increase to reach the pivotal $86,900 level. Such a move could trigger a substantial short squeeze, elevating price momentum through thin liquidity zones as traders rush to cover their positions.
Though Bitcoin has been trading sideways, there is a noticeable shift towards a bullish trend, indicated by a gradual recovery on the daily chart following a turbulent period in March and April. While a clear breakout has not yet materialised, the potential for future price movements appears optimistic.
However, it is important to remain cautious; all market participants, including large investors and automated trading systems, are aware of these liquidation thresholds. Should the $86,900 target garner increased attention, heightened volatility may arise, potentially resulting in sharp price fluctuations in either direction.
