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$18 Billion in Bitcoin Shorts Could Be Liquidated
A sharp increase in liquidity suggests that Bitcoin (BTC) may be preparing for another short squeeze.
As the price of the leading cryptocurrency climbs above $116,700, Bitcoin holds nearly $18 billion in leveraged short positions, with a liquidation zone showing near $120,000, according to CoinGlass data.
The chart below highlights areas with the highest density of leveraged short positions and marks zones most susceptible to liquidation. The green curve on the right visualizes the areas where short sellers are at greatest risk of being wiped out.
BTC Exchange Liquidation Map. Source: CoinGlass
The data reflects a steep rise in the curve just above the $119,000 level, followed by a dense concentration of short positions. This indicates that if Bitcoin starts moving toward this zone, a chain reaction could occur, pulling in late-positioned short sellers and potentially pushing the price even higher.
In other words, the chart shows how many traders are betting against Bitcoin surpassing a critical level. If the asset does rise, these short positions will incur losses, and exchanges will start forcibly liquidating them.
Forced liquidations are likely to trigger a wave of buy orders, as traders are forced to purchase BTC to cover their positions. This surge in buying pressure could once again push prices higher, causing even more liquidations.
On August 7, Bitcoin rose 1% in 24 hours, recovering from a 1.35% decline over the week. Much of the upside was driven by a new executive order by President Donald Trump, allowing cryptocurrencies to be included in 401(k) retirement plans.
On the same day, spot Bitcoin ETFs in the U.S. recorded inflows, with BlackRock reporting a net increase of $41.9 million after several consecutive days of outflows.
See also: "Odds of Spot XRP-ETF Approval Drop Sharply from 86% to 62%"
