After an almost stellar start in July, Bitcoin has performed even more impressively in recent days. This leading cryptocurrency, after a brief consolidation period earlier in the week, reached a new all-time high valuation of nearly $119,000. It is no surprise that the Bitcoin market is experiencing a wave of optimism — a conclusion that is still strongly reinforced by the latest blockchain revelations.

Bitcoin Market Sentiment Shifts to Bullish

In a post on July 11 on the social media platform X, the cryptocurrency analytics company Alphractal conducted an in-depth analysis of Bitcoin's current price movements, providing insights into the future trajectory of this cryptocurrency.

The company's on-chain observations revolve around the aggregate liquidation heat map (7 days), visualizing price levels with high concentrations of long or short liquidations over a 7-day period, and the aggregate liquidation heat map (1 month) serves a similar function, except this map includes a monthly timeframe.

After the recent Bitcoin price surge to a new record high, all over-leveraged bears were wiped out from their market positions. Supported by short-selling, which often occurs after major liquidation events, this leading cryptocurrency continues to maintain strong upward momentum and continues to soar.

According to Alphractal, the aggregate liquidation levels across different time frames currently show that most existing leveraged positions are betting on Bitcoin's price. As the market continues to grow, investor optimism will shift to a more positive outlook, which could encourage more traders to open long positions in the BTC futures market.

However, Alphractal warns against recklessly entering the current bull market. "If for any reason, the price drops by $10,000 to the $107,000 area, then that could be the time when the buyers face a mass liquidation," the analytics company said.

The company further explained that such a sharp drop in Bitcoin's price would negatively impact market optimism. On a positive note, Alphractal also noted that this event could present new accumulation opportunities in the near future.

Still optimistic about the market, the drop in Bitcoin's price by $10,000 could lead to a phenomenon known as a Long squeeze, when Bitcoin's price continues to drop sharply with the upward momentum.

A Long squeeze often occurs when the price of a cryptocurrency (in this case, Bitcoin) falls, forcing traders holding long positions to sell their assets to cut losses or break even. This contributes to the current downward trend and pushes BTC prices even lower.

Amid Bitcoin's current price surge, Alphractal ultimately advised traders to use leverage wisely and cautiously, as the market's next move lies in unpredictable territory.