Bitcoin Bulls Thrive in 'Bullish Neutrality' Amid Short Liquidations

Bitcoin is currently navigating a 'bullish neutrality' phase, where favorable indicators are increasing, and short liquidations are generating upward pressure on prices. With Bitcoin trading around $88,100 and a 24-hour trading volume near $34.3 billion, the market reflects stable liquidity. The market sentiment, represented by a composite indicator, suggests limited risk and potential for growth.

Key Takeaways

Bitcoin is trading at approximately $88,100 with robust liquidity.
The composite indicator indicates a positive score of 16.3, placing it in a neutral market zone.
Historical data shows average returns of 3.8% over 30 days in the current market state.
The dominance of short liquidations is creating upward price pressure.
A shift in market momentum could occur if the regime score dips below zero.

Bitcoin in bullish neutrality as short liquidations drive gains

Bitcoin Price Stability

Bitcoin continues to trade flat around the $88,100 mark, with a 24-hour trading volume of about $34.3 billion. This consistent volume indicates sound liquidity and minimal variation in prices during daily trading sessions. Market depth remains solid, helping to support orderly price movements, even though there have been only slight percentage changes over the past day.

The composite indicator, which evaluates various market factors like taker imbalance and open interest pressure on a scale from -100 to +100, is currently at 16.3. This positioning places the market within the upper neutral zone, typically ranging from +15 to +30.

Historical analysis for 2025 reveals that this subzone has produced average returns of 3.8% over 30-day periods. In contrast, the lower negative zone, between -15 to 0, showed negative returns of 1.5% over seven days. The current indicator has bounced back from a bearish state it experienced just a week prior when the score fell to -27.

Bitcoin bulls navigate ‘bullish neutrality’ as shorts fuel upside pressure - 1

The long/short liquidation dominance oscillator, which tracks differences between long and short liquidations, is currently at -11%, while its 30-day moving average is at +10%. The negative value underscores a stronger trend in short position closures. Long liquidation dominance is recorded at 44%, below the 50% baseline, confirming the prevalence of short liquidations, which further contributes to upward price pressure.

The forced closures of short positions require buyers, generating additional demand in the market, as explained by derivatives market dynamics. If the regime score were to fall below zero, alongside a reversal of the liquidation oscillator into positive territory, it might indicate an end to the current upward momentum. Historical data suggests that the subzone between -15 and 0 yields negative expected returns over a seven-day span.

In summary, Bitcoin's current market environment is characterized as "bullish neutrality," with a regime score at 16.3. The dominance of short closures in the derivatives market is fostering upward price movement, maintaining a cautious optimism among traders.