Bitcoin (BTC) has been consistently performing well over the past few days, as the price has increased by 10.77% in the last week. While this is good news for some traders, others risk losing money if BTC maintains its uptrend.
This analysis pinpoints the potential price levels that BTC could reach and the impact of the trend on open positions in the derivatives market.
The recent price rally threatens short-selling expectations
Over the past 24 hours, Bitcoin has fluctuated around $65,000, currently, the price is trading at $65,302. But before that, BTC reached $66,250 and then fell again. However, according to data from Coinglass, up to $1.32 billion worth of short positions are at risk of being liquidated if BTC reaches $68,066.
This is according to the liquidation heat map. For those unfamiliar with the term, liquidation occurs when an exchange closes a trader's position due to insufficient margin to keep the contract open.
While this is done to prevent further losses, this action can also be due to high volatility when the price moves in the opposite direction of the trader's prediction. Specifically, longs are those betting on price increases, while short sellers are traders in line with the downside.
Therefore, the image above shows how much Bitcoin will lose when Bitcoin reaches the above price. Furthermore, the heat map identifies areas where large-scale liquidations are likely to occur and areas with high liquidity concentrations.
If liquidity is concentrated in a particular region, cryptocurrency prices will likely move toward that region. According to data obtained from Coinglass, Bitcoin price could approach $67,469 and then $68,000. If BTC successfully takes over these areas, the next area of interest will be $72,599, bringing it closer to its all-time high (ATH).
BIG PLAYERS STOP SELLING BITCOIN
In addition to the heat map, this week's massive inflows into the Bitcoin ETF are another piece of data supporting the price increase. Significant capital inflows into these products played a huge role in Bitcoin's rise to ATH in March. The scarcity of liquidity on this front was also important given the downturn experienced in Q2. Therefore, BTC could see a sustained growth if more money continues to flow into ETFs.
Regarding this development, analyst Timothy Peterson suggested that BTC could soon reach $71,000.
He stated on X:
Cumulative net ETF inflows hit a new ATH last week. This marks 6 consecutive days of positive capital inflows totaling $1+ billion.
From an on-chain perspective, the Accumulation Trend Score shows that Bitcoin has exited the distribution phase. Trend scores range from 0 to 1, providing insight into the behavior of large entities in the market. If the cumulative trend score rating is close to zero, it means that, on average, market participants are selling.
This is evident from the trend between April and June. However, at the time of writing by BeInCrypto, the score was 0.55, indicating that the number of coins being purchased on-chain is increasing.
