Bitcoin is facing a massive short liquidation risk exceeding $4 billion, with a significant cluster of $3 billion concentrated at the $112,600 price level, according to data from CoinGlass and market analysts. The current Bitcoin price is hovering around $106,668 to $109,200, positioned within key liquidation zones between $108,000 and $113,000, where heavy short positioning is noted on major exchanges like Binance, OKX, and Bybit.
Market analysts, including Trader Tardigrade, have observed that Bitcoin has broken out of a descending broadening wedge pattern, which typically forms during downtrends and suggests potential for a bullish reversal. This pattern, characterized by diverging trendlines and a series of lower highs and lows, indicates that a sustained upward move could end the current downtrend. If Bitcoin maintains momentum and breaks above $112,600, it could trigger a short squeeze, forcing liquidations that accelerate buying and propel prices toward $115,000-$118,000.
Support levels are identified at $108,000, $106,000, and $102,000, with resistance near $112,000-$114,000 aligning with the 100-day and 200-day moving averages. Trading volumes have risen sharply as prices approach these thresholds, highlighting increased volatility risks. On-chain data shows consistent long-term holder accumulation, contrasting with highly leveraged derivatives markets, setting the stage for potential market shifts in the coming days.
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