Bitcoin Volatility Triggers $118M in Liquidations as Bear Trap Sets Stage for $80K Squeeze

Quick overview

Bitcoin BTC/USD is holding above $77,000 on Monday, down about 2.7% in the past 24 hours, as a tug of war between stubborn institutional buying and a spike in bearish leveraged bets keeps the world’s largest cryptocurrency coiled under the psychologically important $80,000 mark.

The day’s volatility came at a stiff price for traders. In the last 24 hours, more than $118 million in Bitcoin holdings have been liquidated, with long bets making up the lion’s share – more than $108 million — as the price failed to remain above $79,000. Some 6,700 traders globally got caught on the wrong side of the trade, with liquidations at 1.35 times the seven-day norm, a hint of what analysts are calling a “extreme” deleveraging episode.

Bear Trap Ahead for BTC Traders?

But a rising collection of market data implies the bears are falling into a trap of their own design
Leveraged shorts have built up around the $80,000 level over the previous 48 hours, with derivatives data from CoinGlass showing that almost $1.4 billion worth of short positions have been taken. Bitcoin’s swift rejection at $79,500 initially seems to confirm bearish positioning was correct — but analysts caution that a sustained advance above $80,000 could send prices much higher in a matter of hours as a cascade of forced short-covering kicks in.

The funding rates on the perpetual futures market remain significantly negative for the second week in a row to -7% on a 30-day basis — one of the most extreme bearish positioning readings on record. A lot of this brief exposure was paradoxically constructed as Bitcoin climbed from $72,000 to $78,000, which means a big share of those bets are today underwater.

Whales and Institutions Keep Accumulating Bitcoin

And although derivatives traders are bearishly positioned, larger players are taking the other side.
Wallets holding between 1,000 and 10,000 BTC — known as “whales” — have added almost 240,000 BTC since December, increasing their total balance to 3.09 million BTC, the most since November 2025. Meanwhile, long-term holders have accumulated to a balance of 14.57 million BTC, with sell-side activity over the past 30 days being some of the lowest observed all year.

Institutional demand has also been strong. Strategy, a software company that became a Bitcoin treasury company, bought $255 million worth of BTC from April 20 to 26. US-listed Bitcoin ETFs had net inflows of $824 million during the same period. Institutional investors bought a net of around 92,900 BTC last month, according to Bitwise’s Crypto Market Compass, vastly dwarfing the roughly 14,900 BTC net selling that was documented on-chain.

The Macro Wild Card

The Federal Reserve could influence Bitcoin’s next move. Markets are now pricing a 20% chance of a cut by September – a total reversal from only one month ago. Brent crude oil topped $100 a barrel and inflation expectations were creeping higher, complicating the Fed’s tricky balancing act between battling price pressure and nurturing a softening labor market.

A shift towards a more dovish monetary posture might lessen the attraction of fixed-income assets, offering an opportunity for capital to flow into riskier assets such as Bitcoin, potentially sparking the momentum to overcome the $80,000 obstacle.

What’s Next for Bitcoin Price?

Short term technicals are pointing to downside initially. Bitcoin is at risk of testing support around $73,700-$74,700 before another breakout attempt, as it is forming a potential double-top near $79,400 on the 4-hour chart and is seeing increased sale volumes – over $1.2 billion flowed into Binance within one hour on Sunday.

Analysts, however, are hopeful, but only cautiously so. MN Capital founder Michaël van de Poppe said the major support levels are still there and upside objectives of $85,000 to $88,000 are still in play for May.

Spot demand stays strong, but shifts in the macro environment may make short positions risky; coming weeks could be critical for Bitcoin’s 2026 direction.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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