Bitcoin and Ethereum (ETH) have crushed the bearish bets, leading to nearly $1 billion being liquidated on May 8, with 80% coming from Short positions. This is a classic example of a Short Squeeze, and the consequences are not very pleasant.
But surprisingly, the game may not be over for the bears.
The RSI index of both major coins is deeply entrenched in overbought territory — meaning it is too hot. Historically, this is usually the time when the upward momentum stalls and strategic Short positions begin to emerge.
In fact, new data from Coinglass shows that 139,241 traders were 'blown away' in just 24 hours, with a total of $328 million in assets liquidated.
Although the upward momentum is prevailing, Longs are also suffering heavy losses, with a $170 million loss. Such 'sawtooth' volatility is characteristic of the late cycle phase.
So what will happen next?
Technical signals are warning of a potential correction.
We are entering a high-risk oscillation zone. As BTC and ETH are positioned above resistance levels that have turned into support, the market is at a critical turning point.
Momentum indicators are signaling alarms: At the time of writing, the RSI is too hot and the On-Balance Volume (OBV) indicator is beginning to stall — a classic sign of a price surge led by retail investors that is running out of steam.
Meanwhile, the open interest (OI) index increased by 1.25% to $137.44 billion, indicating that financial leverage has returned to play.
Source: Coinglass
That doesn’t necessarily indicate a bullish signal. In fact, with the thinning bid walls, the rise in the OI index could lay the groundwork for a series of liquidations if the support area is broken.
In the past 24 hours, $61.25 million in Long ETH positions have been closed, while BTC wiped out more than $600,000 in Long positions in just a 4-hour timeframe.
This $170 million Long Squeeze might just be the opening act, and if the market stumbles, the situation could become chaotic very quickly.
Bitcoin and ETH: Master the ship or sink to the bottom?
As Bitcoin and ETH hover near local peaks, the next move depends on how smart money acts.
Whale activity at these price levels usually signals one of two scenarios: Distribution trap or a controlled consolidation above the supply zone.
Regardless of the case, the order book is about to be tested, and it will be the whales who decide whether this is a re-accumulation phase or just a panic sell-off as momentum indicators signal exhaustion and Short positions begin to appear.
Data from Lookonchain has just revealed a whale transferring $13 million USDC to the Hyperliquid exchange and Shorting both BTC and ETH — a strategic blow based on short-term reversal expectations.
Unless smart money intervenes to sustain the upward momentum and continues to trap the bears, thin bids and exhausted upward momentum could lead to a reversal scenario.
If the bulls fail here, we might be witnessing the start of a chain liquidation — as a 'retaliation' for the $1 billion Short position that was wiped out earlier in the week.
Experts predict Bitcoin will continue to reach new ATHs in 2025.
Ethereum targets $4,000, breaking through key resistance levels.
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Dinh Dinh
Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making a decision. We are not responsible for your investment decisions.
