Is Berachain [BERA] Preparing for a Short Squeeze After Reclaiming $1?

Berachain's token [BERA] has experienced a significant increase of approximately 10.9% in just 24 hours, reestablishing its position around the $1 mark due to a marked rise in decentralized exchange (DEX) activity and participation in derivatives. This surge indicates a revival in engagement rather than mere speculative trading.

Key Takeaways

BERA has regained $1, marking a notable 10.9% increase in 24 hours.
DEX activity surged to about $17.9 million, reflecting increased trading interest.
The price recovery is accompanied by improvements in liquidity and structured demand zones.
Positive momentum indicators favor further price appreciation, but resistance at $1.065 poses a challenge.

Is Berachain [BERA] setting up a short squeeze after reclaiming $1?

Berachain's Recovery After Holding Demand

Berachain's price has bounced back significantly after holding the critical demand zone at $0.545. The aggressive buying at this level halted a prolonged downtrend, allowing the price to reclaim its regression trend channel, indicating an important structural change. Currently, the upward movement depends on surpassing the resistance at $1.065, a level that previously hindered recovery attempts.

If BERA can maintain acceptance above this mark, it could pave the way towards a potential $2.00 target. Conversely, failing to break through could lead to a period of consolidation above the reclaimed structure. Notably, the recent rebound has avoided deep pullbacks, signifying underlying strength, with price trends favoring continued gains as long as the $0.545 support holds.

Berachain price action Source: TradingView

Directional momentum is currently skewed towards buyers as the Directional Movement Index (DMI) readings indicate strengthening support for upward trends. The +DI line ascended to nearly 34, while the -DI decreased to around 11, illustrating clear buyer dominance. The Average Directional Index (ADX) has also surged past 44, signaling robust trend conditions. Importantly, the growth in momentum has been gradual, minimizing the risk of exhaustion.

Increased Whale Activity through Futures Orders

The average order size in Futures has noticeably increased, indicating a rise in whale participation. Larger orders often suggest that these market players are positioning themselves based on conviction rather than engaging in scattered retail trades. Whales typically do not chase price without structure, aligning their entries with the defense of key demand zones and successful reclaiming of trading channels.

Moreover, increased order sizes tend to stabilize prices at the onset of market trends, resulting in steadier price movements. As whale participation intensifies, there is potential for further price acceleration, particularly if market conditions remain favorable. Any abrupt exits by whales, however, could lead to sharper reversals, but for the time being, the Futures order flow reflects confidence, strengthening the bullish outlook.

Berachain Futures Average Order Size Source: CryptoQuant

Open Interest Reflects Incoming Leverage

As of the latest data, Open Interest in the market has surged nearly 17.7% to around $96.2 million, signaling that new leverage is entering the space. Rising Open Interest alongside price movements typically indicates new positioning rather than merely short-covering. While increased leverage heightens market sensitivity, the current trend shows that price continued upward with the expansion of Open Interest.

Normally, if traders had entered leverage positions late, one would expect to see a stall in price growth, but the opposite is occurring now. Constructive funding conditions are maintaining comfortable levels for traders, allowing them to hold onto their positions. However, higher leverage also amplifies potential price reactions around resistance levels. The behavior of the price near $1.065 will significantly determine whether the leverage will continue to support the rally or lead to rapid unwinding.

Source: CoinGlass

Potential Short Liquidity Above Current Price

The liquidation heatmap highlights a dense accumulation of short positions situated above the current price, mainly between $1.02 and $1.05. This accumulation creates a potential acceleration zone, should the price be able to rise into that range. Liquidity often entices price during strong trends, but it’s crucial for that price movement to maintain momentum; weak attempts typically fall short.

The current price structure shows consistent advancements rather than erratic spikes, favoring a controlled increase. Should the price enter this resistance zone, forced liquidations could quickly amplify upward moves. This means that while volatility may rise near resistance, overhead liquidity acts more like a magnet, drawing prices upwards rather than capping them when buyers sustain their momentum.

Source: CoinGlass

In conclusion, Berachain is currently positioned at a crucial intersection where market structure, momentum, and active participation align positively. Holding above reclaimed levels consistently will maintain bullish momentum. However, if it fails to break through the $1.065 barrier, it may quickly test buyer conviction. The scenario is favorable for buyers, but successful execution around resistance is imperative to enable the evolution of this rebound into a lasting trend.

Final Thoughts