As Bitcoin approaches the monthly / quarterly close, we’re seeing record amounts of order-book liquidity build up. Bitcoin plummeted to noted levels near $107,000 just after. It’s easy to see why analysts are now looking closely for a potential “short squeeze.” As Washington gears up for a possible fall search for a replacement for Federal Reserve Chair Jerome Powell. To make matters worse, the urgency of the search is exacerbated by Trump’s very public criticism of Powell to lower interest rates.
Order-Book Liquidity and Potential for Short Squeeze
In addition, exchange order-book liquidity is increasing as the monthly and quarter closes near, causing traders to expect more volatility. Bitcoin’s price is particularly sensitive to downside breaks, thus causing pain to shorts on small upside moves. There’s a huge wall of short liquidations just above the current price, topping out around $108,000-$108,500.
"Below us, a cluster of long liqs around 106k-107k. But above? A HUGE wall of short liquidations immediately above current price, peaking fiercely around 108k-108.5k!" - TheKingfisher
This high concentration of liquidations looks like the potential for a short squeeze. If the price can break above major resistance levels, it can set off this squeeze. With all this happening, Bitcoin’s price is approaching $105,000.
"That's a strong magnet. Short squeezes can be brutal if price pushes through 107.5k." - TheKingfisher
Market Analysis and Potential Price Movements
Analysts have been monitoring Bitcoin’s uptrend price action, highlighting important support and resistance levels.
"After having launched from this local green area of support... Price is now pulling back into this region for another retest," - Rekt Capital
"Continued stability here would enable another challenge of the Main Downtrend dating back to late May (black)." - Rekt Capital
Fundamentals and technical analyses suggest that Bitcoin’s price is poised for a major breakout. All of this momentum depends on its continued willingness to hold steady and push through resistance levels.
Anticipating Market Volatility
This month-end and quarter-end close could potentially have a huge effect on Bitcoin’s price.
"With BTC spot edging toward $108k, we’re beginning to see a build-up in leveraged longs as perpetual funding rates flip from flat to positive across major exchanges," - QCP Capital
"Positioning appears to be chasing the move, as participants lean into directional bets ahead of quarter-end." - QCP Capital
This means that traders are expecting volatility and positioning themselves ahead of it as the market stages likely last stand at this important new section.
