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Bitcoin is on the verge of a historic move, surging toward all-time highs and just yesterday topping the $71,000 mark. The break has sparked optimism among analysts, who expect further upside in the coming weeks as the U.S. presidential election approaches. Historically, this period has been characterized by increased volatility and market shifts.
Key data from CryptoQuant shows that open interest stands at $22.6 billion, with half of the positions held by bears. If Bitcoin continues to rise, this setup creates a high risk of short-term liquidation, and buying pressure could accelerate as the price climbs above $71,000.
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As momentum builds, the coming days will determine whether BTC can sustain its uptrend or continue to consolidate below all-time highs. Investors are closely monitoring these price levels, as a confirmed breakout could signal new highs for Bitcoin. At the same time, stalling may signal the need for additional integration before a large-scale migration.
Bitcoin bears face serious trouble
Bitcoin bears are currently at high risk of liquidation as the liquidity of their short positions is significant and above the $71,000 threshold. According to top analyst and macro investor Axel Adler, this scenario could trigger a strong bull market if short positions begin to be liquidated en masse. Generates momentum that pushes BTC past all-time highs. adler Shared CryptoQuant chart on Xnoted that Bitcoin open interest has surged to $22.6 billion, with half of the positions held by bears.
In his analysis, Adler emphasizes that the current market structure is poised to come under significant pressure. “There’s no need to be afraid to liquidate short positions to push the price up,” Adler said, adding that a series of liquidations above $71,000 could serve as a launch pad for Bitcoin, pushing it into unknown price discovery. He suggested that it could be raised to a higher level. This process, known as a “short squeeze,” occurs when overleveraged short holders are forced to close their positions, resulting in a large number of buy orders that drive the price even higher.
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If this scenario plays out, Bitcoin will not be the only one to benefit. With BTC leading the market, a rally above all-time highs could usher in a new cycle for the entire cryptocurrency industry. Altcoins typically follow Bitcoin’s lead, and the ripple effect could fuel an all-encompassing bull market that drives new highs across multiple assets.
Investors are watching closely as such developments could renew interest and investment in the crypto market and attract capital from retail and institutional investors. With BTC on the brink of price discovery, the next few days could be crucial in shaping the direction of the market.
BTC Test Critical Supply
Bitcoin is testing the $71,200 supply zone and is above the last resistance level before reaching an all-time high. The bulls appear to be firmly in control, and the price movement points to a possible breakout of this level in the coming days. Breaking and sustaining the $70,000 mark remains important. This psychologically important level reinforces bullish sentiment and encourages more buyers to enter the market.
However, a temporary retracement to gather liquidity at lower demand levels would benefit Bitcoin’s uptrend. A fall towards the $69,000 level or even a drop to $66,500 would still be consistent with the bullish outlook. That could generate more interest and create a healthier foundation for the next rally. These areas allow Bitcoin to gather liquidity before a stronger rally towards new highs.
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Traders are keeping an eye on a sustained rally above $71,200, knowing that it could pave the way for price discovery above the all-time high. A successful breakout could create new momentum across the market and trigger a broader bull market, with Bitcoin leading the way.
Featured image from Dall-E, chart from TradingView
https://www.newsbtc.com/bitcoin-news/bitcoin-bears-fear-a-short-squeeze-above-71000-as-open-interest-rises-to-22-6b/