Bitcoin Reaches $90,000 as Crypto Market Surges, Liquidating $120M in Shorts

Bitcoin Reaches $90,000 as Crypto Market Surges, Liquidating $120M in Shorts

Bitcoin surged back to $90,000 following the opening of Wall Street on Wednesday, attracting the attention of traders watching vulnerable short positions.

Key Takeaways:

Bitcoin has bounced back to $90,000, recovering from previous losses.
Short-term BTC price movements are primarily driven by liquidity dynamics, punishing short positions this time.
Some analysts predict a potential drop below the 100-week moving average, which might indicate a bearish market trend.

Bitcoin's Price Movement and Short Positions

Bitcoin has recovered from its recent dips, making a fresh climb to the $90,000 level. The current boost is largely due to liquidity dynamics, which are crucial for short-term price movements. This time, short positions are facing significant pressure.

Data from Cointelegraph Markets Pro and TradingView highlighted erratic price behaviors, indicating a 2.5% daily gain before a subsequent reversal.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

This market action mirrored events from Tuesday's US market opening, where a fierce competition between buyers and sellers unfolded. At this point, liquidity on both ends was in the spotlight.

“A significant upward move for BTC was observed, with many short positions vulnerable,” said Michaël van de Poppe, a crypto trader, analyst, and entrepreneur. He described the market behavior as “exciting.”

BTC/USDT four-hour chart with RSI, volume data. Source: Michaël van de Poppe/X

Another market commentator, Exitpump, also noted a promising beginning to the US trading session, noticing that shorts were being squeezed above the $88,000 mark.

The latest figures from CoinGlass revealed that over $120 million worth of crypto shorts were liquidated within four hours of writing.

Total crypto liquidations (screenshot). Source: CoinGlass

As trader Daan Crypto Trades pointed out, “BTC is nearly back to its trading levels from six months ago. Liquidity was taken both on the upward and downward trends.”

BTC liquidation heatmap. Source: Daan Crypto Trades/X

Expected Price Trends for Bitcoin

Caleb Franzen, the creator of Cubic Analytics, emphasized the importance of Bitcoin's 100-week simple (SMA) and exponential (EMA) moving averages.

As previously reported by Cointelegraph, these averages, situated just below $85,000, have been identified as vital support levels. “Bitcoin stands on the brink of breaking below its 100-week moving average cloud,” Franzen cautioned earlier.

He warned that a breakdown could happen “soon,” but also suggested it could provide an opportunity for investors to buy the dip through dollar cost averaging (DCA).

BTC/USD three-day chart with 100-week SMA, EMA. Source: Cointelegraph/TradingView

Others are predicting new macro lows could approach, with trader Roman indicating that a drop to $76,000 may occur soon.

“While this bounce may feel significant, I believe it’s temporary. The $76,000 mark is likely on the horizon,” he noted.

Source: Roman/X

This sentiment aligns with the current speculative atmosphere within the crypto market, as traders remain vigilant about their positions.