The Bitcoin (BTC) Price Facing Major Liquidations and Bouncing Back
The Bitcoin (BTC) price recently experienced the largest liquidations since 2021, with over $1.78 billion in overleveraged positions being liquidated. This led to a sharp downfall from $101,000, with the token dropping by 6% and reaching lows close to $94,000. However, the price has since bounced back as sellers seem to have exhausted their selling pressure, pushing the token back above $98,000 at the moment. While buyers are struggling to maintain the upward momentum, a small push to certain levels could signal the start of a new ascending trend.
Impact of Spot and Derivatives Markets
The spot markets play a crucial role in maintaining the volatility of the token, preventing it from stagnating in a narrow range. However, the derivatives market has a significant impact on the current price of the asset. Bitcoin is the preferred choice for traders dealing in futures or options, and price actions are heavily influenced by long or short liquidations. Following a period of high long liquidations, there is now an opportunity for short liquidations, which could potentially push the price above $100,000 and set new highs above $105,000.
The chart above indicates that nearly a billion high-leveraged shorts are concentrated around $99,000. If the bulls manage to push the price up by another 2%, these shorts are likely to be liquidated, propelling the price beyond $100,000.
Future Outlook for BTC Price
Publicly traded companies like Marathon Digital Holdings and MicroStrategy have been actively accumulating Bitcoin, with Marathon acquiring 11,774 BTC for $1.1 billion and MicroStrategy adding 21,550 BTC worth over $2.1 billion. Additionally, Blackrock’s IBIT leads the spot ETF inflows and holds a significant amount of BTC, indicating growing institutional interest in the token.
Considering these factors, it is evident that the Bitcoin (BTC) price is supported primarily by institutional investors and derivative market dynamics. This bodes well for the future prospects of the token, suggesting a bullish outlook and potentially higher targets for the ongoing bull run.