Bitcoin (BTC) is consolidating around the $120,000 support level, with traders closely watching for a potential short squeeze that could drive prices higher. The cryptocurrency hit a local high of $121,100, and analysis indicates that bulls are targeting overhead ask liquidity near $123,200 to address imbalances in the chart.
Total futures open interest across exchanges reached a record $88.7 billion, raising alarms about excessive leverage. Popular trader BitBull predicted a "leverage flush" in the next 1-2 weeks, which could force selling before a potential rally to new highs. Concurrently, bearish relative strength index (RSI) divergences on daily and weekly timeframes cast doubt on the sustainability of the bull market, with RSI showing lower highs as price sets records near $124,500.
Derivatives data reveals mixed signals: the three-month annualized basis is elevated at nearly 8%, and Deribit's funding rate is exceptionally high at 25%, indicating aggressive long positions. However, the options market shows neutrality, with a flat 1-week 25 delta skew of 0.33%. Liquidations totaled $380 million in 24 hours, with a 35-65 split between longs and shorts, and key support is noted around $118,500.
Altcoins like ETH, SOL, and XRP rose over 2%, benefiting from Bitcoin's consolidation, while tokens such as MYX and XPL faced significant declines due to leverage unwinds and market speculation.