Let’s talk about $BTC with a simple example to help you understand how market dynamics work, especially during a bullish trend.
Imagine two traders — one goes long at $108,000, and another goes short at the same price. The liquidation price for the long position is $106,000, while the short’s liquidation point is $110,000.
Now, if the market sentiment is bullish and the price starts rising, say it hits $108,800, and the long trader decides to exit and take profit — what happens next?
Here’s where it gets interesting.
Because the market is moving up, bulls are in control and are taking profits. There are no opposing (short) orders below to apply downward pressure, and above, there’s also little resistance — the pressure actually sits on the bears. But here’s the key point: the price doesn’t rise because buyers are pushing harder — it rises because shorts are getting squeezed.
When the price approaches the short trader’s liquidation point ($110,000), their position gets liquidated, and their funds are used in part to pay out the longs. A portion of the liquidated funds also goes to the exchange.
So even though I exited my long at $108,800, the price continued to rise. Why? Because the short positions kept getting crushed one after another.
That’s the logic I want to highlight: in a bullish market, opening short positions too early can be a dangerous game. No matter how confident you are, if you’re constantly shorting in a strong uptrend, chances are you’ll get buried before the price even reaches your expected target.
---$BTC
