The crypto market is facing a potential shock as the Bitcoin price approaches a new high. If Bitcoin reaches the $90,000 mark, massive liquidations of short positions worth $9.41 billion are imminent.
The crypto market is on alert as the Bitcoin price continues to rise, with the possibility of $9.41 billion in short positions being liquidated if Bitcoin reaches the $90,000 mark. This development could lead to a significant increase in volatility, as traders who have bet on falling prices would be forced to close their positions.
A crypto analyst on the platform X, formerly known as Twitter, has pointed out that a significant buildup of short positions is being observed. If Bitcoin continues to rise, it could trigger a so-called short squeeze, in which prices continue to rise due to forced buying by short sellers.
A heatmap shared by the analyst shows that a large portion of short liquidations are concentrated between $80,000 and $90,000, with the greatest risk at the $90,000 level. Traders should therefore pay attention to resistance or momentum shifts in this critical price range.
If Bitcoin reaches the $90,000 mark, traders who have bet on falling prices may be forced to cover their losses, potentially leading to a further rise in the Bitcoin price. Such liquidations occur when traders who have bet against a price increase are forced to close their positions due to rising prices.
The analyst’s report shows that liquidation volumes are steadily increasing as Bitcoin surpasses key resistance levels. About a week ago, a spike to $87,000 resulted in the liquidation of $77 million in short positions.
An even larger liquidation event could occur at $90,000, which is now considered a psychological barrier for Bitcoin. A short squeeze could hit the market if BTC reaches this level, which often leads to high volatility as large liquidation spikes drive prices further higher.
According to CoinMarketCap, the Bitcoin price is currently at $83,029, representing a 1.12% increase over the past 24 hours. Traders are closely monitoring the market as it approaches the $90,000 mark, a potential 8.39% increase from the cryptocurrency’s current market value.
Another market analyst warns that Bitcoin could soon experience a significant market shakeout. However, once the market stabilizes, a massive breakout could follow.
The analyst shared a price chart depicting this breakout scenario, highlighting a black zigzag line indicating a potential drop in Bitcoin price to the purple support and demand zone between $78,692 and $70,000. Once BTC reaches this area, the price is expected to rise to the projected target of $94,655.
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