More than $4 billion of long positions are now within striking distance of liquidation, almost $77,000 – a figure that underlines how much Bitcoin is expected to keep its current position above $80,000.
Related reading
Bears keep rebuilding and keep getting burned
Facts Research by Bitcoin researcher Axel Adler Jr. shows that nearly $8 billion in short positions have been forcibly closed since early February, with the largest single-day spike reaching $737 million on February 13.
The liquidations did not come all at once. They arrived in three separate waves, stretching from February through April. Each wave was triggered as bearish traders rebuilt their positions at higher price levels – only to be caught out again when the price remained firm.
Daily liquidation volumes had fallen to a range of $2 to $28 million before rebounding to $175 million on May 4. That jump came during an otherwise quiet week, indicating new short positions were being built around $80,000.
Reports say the recurring pattern shows traders consistently betting against the price – and consistently being forced out.
Source: Axel Adler Jr.
Adler’s trend pulse model adds context. Bitcoin moved out of bear mode into neutral territory in early April. Short-term momentum has turned positive, although a fully bullish signal would require the 30-day simple moving average to move above the 200-day mark.
According to the data, every major liquidation wave to date has occurred while the trend was in this neutral zone – a transition phase that has repeatedly caught short sellers off guard.
Rising open interest is increasing the pressure
Bitcoins open interest on all stock exchanges the price rose by 6% at the beginning of May to almost $30 billion, the highest figure since January 31. That increase means the market is more sensitive to sudden price movements – up or down.
The financing rate remains around -0.0045, a sign that the pressure on the short side is still active, while the long positions are not yet overcrowded.
Market analyst Coin Niel reported net outflow of exchanges of 837 BTC on May 5, after a much larger outflow of 6,590 BTC the previous Monday.
Persistent outflows tend to reflect accumulation as coins move from exchanges to private wallets, reducing the supply available for immediate sale.
Related reading
Bitcoin broke above a descending trendline that had limited price gains in April. The 100-day exponential moving average is now just below the current price, acting as a dynamic bottom.
The short-term basis for holder costs is near $81,500, a level that keeps recent buyers profitable and could further reduce short-term selling pressure.
Supply zone ahead, with a large drop below
The $86,000 to $90,000 range represents a zone of prior selling activity – a cluster where sellers stepped in during the last recovery and pushed the price back down. That zone is the next big test for any further rally.
Featured image from Vecteezy, chart from TradingView