Bitcoin is currently at a strategic crossroads where forced liquidation of short positions could send its price soaring toward the $90,000 mark. Since early February, the market has already seen short liquidations totaling a staggering $7.9 billion, indicating a growing market imbalance. While many traders are still trying to bet on a decline below the $80,000 level, the stable price and persistent outflow of coins from exchanges are creating the ideal conditions for another forced rally, known as a short squeeze.
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Billions in Liquidations and Pressure on Bears
Analyst Axel Adler Jr. notes that the biggest shock came in mid-February, when a wave of liquidations worth $737 million swept through the market in a single day. Even after a relatively calm period, forced liquidation volumes unexpectedly returned to high levels, as evidenced by the May spike to $175 million in a single day. This trend suggests that despite the seemingly neutral sentiment, short sellers are under constant pressure, which could at any moment result in another aggressive upward price spike.
The shift in market trend from bearish to neutral is now a key factor for future developments. Although short-term momentum is positive, analysts are still waiting for confirmation of a long-term uptrend through technical indicators, specifically a crossover of the 30-day and 200-day simple moving averages (SMA). It is precisely during this transitional phase that traps are most often set for sellers attempting to reverse the market just as Bitcoin prepares to test new highs.
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Key support zones and outflows from exchanges
On the supply side, the ongoing outflow of bitcoins from exchanges to private wallets also supports growth, signaling that large players are accumulating their positions rather than selling them. The net outflow of coins from trading platforms effectively limits selling pressure in the spot market. This fundamental factor complements the technical picture, in which Bitcoin has managed to break through the downward trend line that had been holding back growth throughout April and now finds solid support in the moving averages.
Current data shows a significant liquidity imbalance, with short positions worth over a billion dollars at risk at the $82,500 level. If the price breaks above this level, forced buying by these traders could trigger a domino effect all the way to the $90,000 zone, where strong supply has been located in the past. Conversely, the area between $76,000 and $78,000 serves as the first significant demand zone, protecting the market from a deeper decline and keeping current buyers in profit.
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