Bitcoin Hovers Above $88K as Traders Target $93.5K Liquidation Zone Amid Fed Rate Hold
With no fluctuation over the last day, Bitcoin (BTC) is currently trading above $88,000 as investors process the Federal Reserve's decision
Quick overview
- Bitcoin is currently trading above $88,000 as investors react to the Federal Reserve's decision to maintain interest rates.
- There is a significant concentration of short positions around the $93,500 level, which could trigger a short squeeze if Bitcoin reaches that price.
- Technical indicators suggest caution, with signs of market stress and a lack of clear accumulation from large holders.
- The current price action faces resistance at moving averages, with potential declines to $84,000 or a rally towards the $94,789 to $97,924 resistance zone.
With no fluctuation over the last day, Bitcoin BTC/USD is currently trading above $88,000 as investors process the Federal Reserve’s decision to keep interest rates where they are. The market was in a state of cautious caution after the Fed’s pronouncement, even though the flagship cryptocurrency saw a brief rally above $90,600 on Wednesday.
Massive Short Liquidation Zone Points to $93.5K Target
On-chain data shows a strong setup for Bitcoin bulls despite the recent decline. Mark Cullen, a cryptocurrency trader, claims that over $4.5 billion in total short positions are concentrated around the $93,500 price level, forming what he refers to as a “sore thumb” on Bitcoin’s exchange liquidation map, a blatant “Come get me!” signal for aggressive traders.
This concentration of leveraged short positions is supported by CoinGlass data, which indicates that forced liquidations may cause a sharp price acceleration if Bitcoin is able to move into the $93,500 zone. This occurrence, referred to as a “short squeeze,” happens when traders cover their positions, creating purchasing pressure that intensifies over time and has the ability to turn a slow rally into an explosive run higher.
However, there are substantial obstacles in the way of reaching this liquidation zone. The institutional demand from US-based investors is tracked by the Coinbase Bitcoin premium index, which is still very negative. This suggests that leverage and futures market activity, rather than natural spot purchases from US institutions, are the main drivers of current price action, which raises concerns about sustainability.
BTC/USD Technical Indicators Flash Warning Signs Despite Bounce Potential
A number of technical signs indicate that caution is necessary, even though the short liquidation position offers an alluring opportunity. Both the on-chain pressure oscillator and the Composite risk oscillator, which tracks SPX, gold, crude oil, and DXY versus BTC, are still firmly rooted in risk-off area, according to cryptocurrency analyst Leo Ruga. On-chain pressure is currently above 34, which has historically been linked to market stress rather than trend expansion, while the risk oscillator is currently close to 52.
Ruga stated, “For a sustained recovery, selling pressure must run out,” implying that any positive momentum could find it difficult to hold up in the present environment.
Analyst Pelin Ay adds the Whale Ratio, which is presently trading close to its 100-day moving average without exhibiting clear accumulation, to the mix of indications. Whales aren’t actively selling, but they’re also not setting up for a big price increase, suggesting that big holdings are taking a wait-and-see stance that might prolong erratic, aimless trading.
Bear Market Warning: Supply in Loss Indicator Reverses Course
The 365-day simple moving average of Bitcoin’s Supply in Loss measure, which bottomed in October when BTC reached its all-time high above $126,000, has started to trend upward, which may be the most alarming development for long-term holders. The early stages of bear markets, when losses shifted from short-term traders to longer-term participants, have traditionally been identified by this indicator, which calculates the percentage of circulating supply held at a loss.
The shift in direction reflects trends that foreshadowed prolonged downturns in earlier cycles, even though present levels haven’t reached the capitulation zones observed in prior bear markets. However, when the H1-2025 dip gave way to fresh bullish momentum, an earlier reversal in this cycle turned out to be ephemeral, and it is still unclear if this is the start of a true bear market.
Bitcoin Price Outlook: Critical Battle at Moving Averages
Technically speaking, the current rescue bounce in Bitcoin has reached its moving averages, where considerable resistance from bears is anticipated. If sellers are able to hold this level, Bitcoin may drop to the $84,000 support area. Further declines might push prices to $80,600 or perhaps the strong support level of $74,508 if there was a clear closure below $84,000.
On the other hand, a rally toward the $94,789 to $97,924 resistance zone—conveniently aligned with the $93,500 short liquidation cluster—would be made possible by a break and closing above the moving averages. If this resistance is successfully broken, it would indicate that the corrective phase is probably over and might bring about a new leg higher.
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