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Bitcoin is on the cusp of a historic move as it heads towards its all-time high, rising above the $71,000 mark yesterday. This outbreak has fueled optimism among analysts, who expect a further increase in the coming weeks as the US elections approach – a period historically characterized 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 short liquidations, potentially increasing 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 all-time highs will continue. Investors are closely watching these price levels as a confirmed breakout could mean new highs for Bitcoin. At the same time, stagnation may indicate a need for additional consolidation before taking a bigger step.
Bitcoin is in serious trouble
Bitcoin bears are now at high risk of forced liquidations as a significant level of short position liquidity hovers above the $71,000 threshold. According to top analyst and macro investor Axel Adler, this scenario could unleash a powerful rally as short positions begin to liquidate en masse. Creating momentum that pushes BTC past its all-time highs. Adler shared a CryptoQuant chart on Xnoting that Bitcoin Open Interest has risen to $22.6 billion, with half of these positions held by bears.
In his analysis, Adler emphasizes that the current market structure is ready for major pressure. “There is no reason to hesitate in liquidating short positions to drive the price higher,” Adler said, suggesting that a cascade of liquidations above $71,000 could act as a launch pad for Bitcoin, pushing it to unprecedented price levels can increase. This process, known as a “short squeeze,” occurs when over-indebted shortholders are forced to close their positions, resulting in large buy orders that push prices even higher.
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If this scenario unfolds, Bitcoin would not be the only one to benefit. Since BTC leads the market, a rally past previous highs could signal a new cycle for the entire crypto space. Altcoins typically follow Bitcoin’s lead, and the spillover effect could trigger an extended bull run, with new highs across multiple assets.
Investors are watching it closely as such a move could renew interest and investment in the crypto market, attracting retail and institutional capital. With BTC on the brink of price discovery, the coming days could prove crucial in shaping the direction of the market.
BTC tests crucial offer
Bitcoin is testing a supply zone at $71,200, hitting the final resistance level before reaching its all-time high. Bulls appear to be firmly in control, with price action indicating a likely breakout above this level in the coming days. Breaking and holding above the $70,000 mark remains critical. This psychologically significant level reinforces bullish sentiment and encourages more buyers to enter the market.
However, a temporary retracement to accumulate liquidity at lower demand levels would benefit Bitcoin’s uptrend. A dip towards the $69,000 level, or even to $66,500, would still be in line with a bullish outlook. It could generate even more interest and create a healthier foundation for the next rally. These areas would allow Bitcoin to accumulate liquidity before making a stronger push to new highs.
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Traders are watching, knowing that a sustained move above $71,200 could pave the way for price moves beyond record highs. A successful breakout could spark renewed momentum in the market, leading to a broader bull run as Bitcoin takes the lead.
Featured image of Dall-E, chart from TradingView
