TLDR
Bitcoin approaching $66,200 liquidation level that could trigger $10 billion short squeeze
Further liquidations possible at $70,300 and $72,578 levels
Short squeeze could forcibly propel Bitcoin price upwards
Open Interest for Bitcoin has been rising since September 7
Exchange inflows show increased Bitcoin trading activity recently
Bitcoin is approaching several important price levels that could trigger a significant short squeeze, potentially driving the cryptocurrency’s value sharply higher.
Data from market analysts suggests that a series of liquidation events may occur if certain price thresholds are reached.
The first key level to watch is $66,200. At this price, approximately $10 billion worth of short positions are at risk of liquidation.
If Bitcoin reaches this mark, it could set off a chain reaction. When short positions are liquidated, it typically results in automatic buy orders to cover those positions. This sudden increase in buying pressure can cause the price to spike quickly.
Heat Map Warning : Possible short squeeze alert ⚠️
At $66200 $10b shorts will be liquidated. A liquidated short leverage trade is a Spot buy. This can trigger a short squueze into the $16b liquidations sitting at $70300 which can squeeze into the $18b at $72578. pic.twitter.com/ochP0qn1Ew
— MartyParty (@martypartymusic) October 7, 2024
If Bitcoin’s price continues to climb, the next major liquidation level is around $70,300. At this point, an additional $16 billion in short positions could be at risk. This would likely lead to another wave of forced buybacks, potentially pushing the price even higher.
The final significant liquidation zone identified by analysts is at $72,578. Here, $18 billion in short positions could face liquidation.
If Bitcoin reaches this level, it could trigger a third wave of buy-side pressure, potentially launching the price into a more substantial rally.
These potential liquidation events are particularly noteworthy given recent market trends. Since September 7, Bitcoin’s Open Interest has been on the rise.
Open Interest is a measure of the total number of outstanding derivative contracts that have not been settled. An increase in Open Interest suggests that more traders are entering the market and taking positions.
At the same time, Bitcoin exchange inflows have shown periodic spikes over the past month. Exchange inflows refer to the amount of Bitcoin being moved onto exchanges, often interpreted as a sign that traders are preparing to sell or trade their holdings.
The recent uptick in inflows could indicate increased trading activity as investors position themselves for potential price movements.
