Bitcoin Surges Above $121,500 as Massive Short Squeeze Looms with $18B Liquidation Risk
Bitcoin (BTC) has been very strong in recent trades, going above $121,500 and gaining more than 4% in the last 24 hours. Technical analysts
Quick overview
- Bitcoin has surged above $121,500, gaining over 4% in the last 24 hours, indicating potential for a significant upward movement.
- A short squeeze could trigger nearly $18 billion in liquidations, further driving prices higher if Bitcoin rises by 10%.
- Institutional investments, including Harvard's $116.6 million in a Bitcoin ETF, and favorable regulatory changes are bolstering Bitcoin's market strength.
- Analysts predict that if Bitcoin maintains support above $115,700, it could reach new all-time highs, with a target of $131,000.
Bitcoin BTC/USD has been very strong in recent trades, going above $121,500 and gaining more than 4% in the last 24 hours. Technical analysts have found important support and resistance levels for the world’s biggest cryptocurrency, which could mean that it is ready for a big move up.
Bitcoin’s Short Squeeze Dynamics Create Bullish Setup
A look at the structure of the market shows a strong story about where Bitcoin is going in the near future. present positioning data shows that a 10% rise from present levels may cause almost $18 billion in short liquidations, which would set off a huge short squeeze that might send prices far higher.
The liquidation scenario is riskier for bearish holdings, with weekend trade already causing $350 million in total crypto liquidations in just 24 hours. This volatility outside of business hours has set new August highs, with BTC/USD hitting $118,760 on key exchanges before the recent rise to over $121,500.
Rekt Capital, a technical analyst, says that Bitcoin is “on the cusp of reclaiming ~$117,200 back into support,” which shows how important the next weekly close will be. Traders say that the cryptocurrency seems to be gaining momentum for a “decisive” move that might set the next big trend direction.
Critical Technical Levels and Price Targets
From a technical point of view, Bitcoin is currently facing resistance near the $120,500 level and is getting important support above the $115,700 level. The 50-day exponential moving average near $115,592 and the crucial Fibonacci retracement level at about $117,518 have set a solid base for the price to keep going up.
Market researcher Donald Dean has found a big “volume shelf” between $116,000 and $118,000. This is a price range where a lot of trade has happened. Dean’s next big upside goal is the 1.618 Fibonacci extension near $131,000, which is generally the starting point for big breakouts.
The Relative Strength Index is currently close to 63, which means there is still opportunity for more rises before the market becomes overbought. If there is a short-term drop, traders are still looking at a CME gap at $116,500 as a possible downside objective.
Institutional Momentum Drives Fundamental Strength
Institutional adoption is still a big reason why Bitcoin’s price is going up, even though there are other technical reasons. Harvard University’s recent $116.6 million investment in BlackRock’s IBIT Bitcoin ETF is a big vote of confidence from one of the most respected institutional investors in the world. With this investment, Bitcoin is now the fifth-largest position in Harvard’s stock portfolio.
Companies that trade on the stock market currently own more than 628,000 BTC, which is worth more than $74 billion. MicroStrategy just added more than 4,000 BTC to its treasury. Spot Bitcoin ETFs saw a lot of money come in on August 9, with about $935 million coming in. This shows that institutions still have faith in the asset class.
Changes in regulations are also making people feel good about things. El Salvador has approved important laws for investment banking that let regulated banks retain Bitcoin on their balance sheets. At the same time, Texas is working on creating a state Bitcoin reserve. President Trump’s recent rule that lets 401(k) retirement plans hold cryptocurrencies might open up a lot of new investing funds.
Bitcoin Price Prediction and Market Outlook
Looking ahead, several factors point to the possibility of further rising momentum. The Bitcoin halving event that will happen in 2025 is known to lower the amount of new coins available, and prices have gone up for months after that. This change on the supply side gives the current technical arrangement more support.
The Fear & Greed Index shows that the market is still cautiously hopeful, with a score of 67. Some analysts think that Bitcoin will be volatile in the medium future, with prices going up and down between $112,000 and $117,000. However, most people agree that prices will go up if Bitcoin can stay above the current support level.
The combination of good technical signs, more institutions using it, regulatory support, and the imminent halving event might all help Bitcoin reach new all-time highs. If the expected short squeeze happens and the $131,000 technical goal is reached, it would mean a gain of almost 13% from where we are now.
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