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Bitcoin Short Sellers on Edge as Price Nears $70,000

Bitcoin short sellers face $1.67 billion in liquidations if the price hits $70,000. Despite recent drops, market sentiment is bullish. Analysts predict significant liquidations may pave the way for new all-time highs.

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A significant number of Bitcoin short positions are at risk of being wiped out if Bitcoin's price returns to $70,000, a level it has not reached in the past 12 days. Data from CoinGlass reveals that an astonishing $1.67 billion in short positions will face liquidation if Bitcoin climbs back to this price point.

Rising Liquidations and Market Sentiment

Bitcoin, which has been trading below $70,000 since June 8, is currently priced at $66,251. According to Tradeview, a rise of 7.46% from its current level would bring Bitcoin to the $70,000 mark. Over the past week, Bitcoin has dropped by 3.23%(1), adding to the anxiety of short sellers.

Pseudonymous crypto trader Ash Crypto highlighted this tension in a recent post, noting the significant amount of potential short liquidations. Market sentiment remains bullish despite recent price drops. Joshua Jake, CEO of Discover Crypto, emphasized this bullish outlook, stating that liquidations for both Bitcoin and Ethereum are accumulating, suggesting an imminent bounce in prices.

Bitcoin’s open interest (OI)—the total value of all outstanding or unsettled Bitcoin futures contracts—has seen notable fluctuations. Since reaching its all-time high on June 7, Bitcoin’s OI has decreased by 10.99%, standing at $33.55 billion. However, it remains 82% higher than on January 1.

The rise and fall of open interest can indicate different market trends. A drop in open interest may suggest a weakening trend, while an increase points to growing market interest. Earlier in June, Bitcoin's OI surged by over $2 billion in just three days, leading traders to anticipate a potential "whipsaw" effect on its price.

The Path to New All-Time Highs

Prominent crypto analyst Willy Woo has suggested that a significant liquidation event might be necessary for Bitcoin to reach new all-time highs. Woo, the creator of the on-chain data resource Woobull, believes that a substantial number of liquidations are needed before Bitcoin can resume its bullish trajectory.

On June 19, Woo wrote, “We need a solid amount of liquidations still before we get the all clear for further bullish activity.” He further explained that enduring more "pain and boredom" is essential before Bitcoin can break its all-time highs. Woo is not alone in this sentiment. Other analysts have also described Bitcoin’s recent price action as "boring" following the Bitcoin halving on April 20.

Julien Bittel, head of research at Global Macro Investor, echoed this view. He described the current phase as “The Boring Zone” before Bitcoin enters what he calls “The Banana Zone,” suggesting that this period of stagnation is a precursor to more significant price movements.