Bitcoin’s (BTC) sharp 7.4% rebound kick-started the first week of January and has shifted markets’ focus back to futures positioning, where liquidation data suggests the price action may be asymmetric.
Key takeaways:
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Over $10.6 billion in long liquidations sit below $84,000, versus just $2 billion in shorts above $104,000.
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Retail positioning on Hyperliquid shows shorts are more vulnerable to upside squeezes than longs to downside moves.
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Bitcoin must reclaim the $100,000 cost basis to confirm a structural trend reversal.
Liquidation imbalance raises volatility risk for BTC
According to data from CoinGlass, approximately $10.65 billion in leveraged long positions would be liquidated if Bitcoin revisits $84,000. In contrast, only around $2 billion in short positions face liquidation if BTC rallies to $104,000.
This imbalance matters because liquidations can act as forced market orders. A downside move toward $84,000 risks long liquidations, accelerating selling pressure. On the upside, however, fewer shorts mean less fuel for a squeeze, unless positioning changes rapidly.
However, on Hyperliquid, the outlook is different. Crypto trader ChimpZoo highlighted that retail traders were disproportionately short, noting that a rally could liquidate roughly 6,000 BTC worth of retail shorts, compared with only 2,000 BTC of retail longs on a similar downside move.
Calling the setup “absurd,” the trader argued that such positioning could propel Bitcoin to new highs at a rapid pace. However, a closer look at the data suggested a more balanced risk profile. While the exchange still shows a net short bias, liquidation exposure on a $10,000 price move is relatively symmetrical.
On such a move, approximately 3,860 BTC in long positions would be liquidated on a downside swing, compared with roughly 4,100 BTC in short positions on an upside move.
Related: Is Venezuela hiding a 600K Bitcoin reserve? Analysts remain unsure
$100,000 level remains the decisive structural test
Despite liquidation-driven momentum, Analyst Crypto Dan cautioned that a straight-line move to new all-time highs is unlikely. First, Bitcoin must reclaim its 6 to 12 month holder cost basis to confirm a trend reversal.
That level currently stands at around $100,000. A sustained break above it would signal a shift back to a bullish market structure and open room for further upside. Rejection would suggest the broader downtrend remains intact despite recent initial strength.
From a technical standpoint, short-term risks also persist below current prices. Bitcoin may retest CME gaps formed over the weekend between $90,600 and $91,600, with another gap still unfilled lower down between $88,170 and $88,700.
If BTC rejects near $96,000 resistance, these gaps could come back into play as the month progresses.
Related: Bitcoin enters ‘strength’ phase, but $100K debate heats up between traders
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
