Bitcoin’s price remained stable over the weekend, settling at around $62,000. However, an analyst MartyParty, has identified a possible short squeeze based on Bitcoin’s liquidation chart. This alert indicates a potential market movement that could significantly impact prices. If certain thresholds are reached, Bitcoin could see a rapid price increase.
Current Liquidation Levels
According to the analyst’s data, Bitcoin‘s price stood at $66,823.8 as of October 4, 2024. The liquidation leverage at this level is $10.83 billion. Further, other important price points were observed in recent weeks.
Heat Map Warning : Possible short squeeze alert ⚠️
— MartyParty (@martypartymusic) October 7, 2024
At $66200 $10b shorts will be liquidated. A liquidated short leverage trade is a Spot buy. This can trigger a short squueze into the $16b liquidations sitting at $70300 which can squeeze into the $18b at $72578. pic.twitter.com/ochP0qn1Ew
On September 16, 2024, Bitcoin reached $70,326.88, with $16.15 billion in liquidations. Also, on September 23, 2024, the price hit $72,578.86 with $17.86 billion in liquidations. This data enabled the analyst to predict a short squeeze to occur near $66,200.
At this point, $10 billion in short positions could be liquidated. This would create buying pressure as these liquidations turn into spot buys, which could push the price higher. If Bitcoin moves past $66,200, it could trigger more liquidations at higher levels.
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If Bitcoin crosses $66,200, the next target would be $70,300. If reached, nearly $16 billion in liquidations could be triggered. If it reaches further up at $72,578, an additional $18 billion is awaiting liquidation. This situation could cause a short squeeze. Notably, rapid liquidations would drive the price higher, creating a rapid shift in the market.
Considering the recent price movements, there are chances that the market is approaching these key levels. Traders with short positions are at risk of liquidation. If Bitcoin hits these thresholds, forced liquidations could push the price up in a chain reaction.
Heat Map Indicators
The heat map reveals concentrated liquidation clusters between $70,000 and $73,000. These clusters are areas where many traders have leveraged positions. The bright green and yellow zones on the heat map highlight the location of the liquidations. If the price nears these zones, it may result in high volatility.
The market’s buy signals above lower support and the current market has the capacity to retreat quicker from a fall. This implies that traders who have ‘short’ positions are currently in a tight position. When considering the Bitcoin price, it is still possible for the value of BTC to spike up when it nears the liquidation zones. If liquidations rotate into spot buys, the push could be more, further fueling the market.
