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Bitcoin is poised for a historic move as it hits all-time highs, surpassing the $71,000 mark yesterday. The breakout has sparked optimism among analysts, who expect further gains in the coming weeks as the U.S. election approaches, a period historically marked by increased volatility and market shifts.
Critical data from CryptoQuant indicates that Open Interest has reached $22.6 billion, with half of these positions held by bears. If Bitcoin continues to rise, this setup creates a high risk of near-term liquidations, potentially accelerating buying pressure as prices rise above $71,000.
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As momentum builds, the coming days will determine whether BTC can maintain its uptrend or whether a consolidation phase below the all-time high will continue. Investors are closely watching these price levels as a confirmed breakout could signal new highs for Bitcoin. At the same time, a block could suggest the need for further consolidation before a larger move.
Bitcoin bears in serious trouble
Bitcoin bears are now at high risk of forced liquidations as a significant level of short liquidity exceeds the $71,000 threshold. According to analyst and macro investor Axel Adler, this scenario could trigger a powerful rally if short positions start to be liquidated en masse. Create momentum that propels BTC past its all-time highs. Adler shared a CryptoQuant chart on X, noting that Bitcoin Open Interest surged to $22.6 billion, with half of those positions held by bears.
In his analysis, Adler highlights that the current market structure is on the verge of a major tightening. “There is no need to hesitate to liquidate short positions to drive prices higher,” says Adler, suggesting that a cascade of liquidations above $71,000 could serve as a launching pad for Bitcoin, taking it towards uncharted levels of price discovery. This process, known as a short squeeze, occurs when holders of overleveraged short securities are forced to close their positions, resulting in large buy orders that drive prices even higher.
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If this scenario comes true, Bitcoin would not be the only one to benefit. While BTC leads the market, a rally beyond previous highs could signal a new cycle for the entire crypto space. Altcoins are generally following Bitcoin’s lead, and the ripple effect could fuel an overall bull run, with new highs across several assets.
Investors are watching closely, as such a move could reignite interest and investments in the crypto market, attracting retail and institutional capital. With BTC on the cusp of price discovery, the next few days could prove crucial in determining the direction of the market.
BTC tests crucial supply
Bitcoin is testing a supply zone at $71,200, grazing the last resistance level before hitting its all-time high. The bulls appear firmly in control, with price action signaling a likely breakout above this level in the coming days. Crossing and maintaining the $70,000 mark remains crucial. This psychologically significant level reinforces bullish sentiment, encouraging more buyers to enter the market.
However, a temporary retracement to gather liquidity at lower demand levels would benefit Bitcoin’s uptrend. A decline towards the $69,000 level, or even as low as $66,500, would still correspond to a bullish outlook. This could generate more interest and create a healthier basis for the next rally. These zones would allow Bitcoin to gather liquidity before pushing harder towards new highs.
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Traders are watching, knowing that a sustained move above $71,200 could pave the way for price discovery beyond all-time highs. A successful breakout could spark further momentum in the market, sparking a broader uptrend as Bitcoin leads the charge.
Featured image of Dall-E, chart by TradingView
