Tensions are rising in the crypto market, especially for those who are betting on a drop in Bitcoin’s price. Short sellers are feeling the heat right now. If Bitcoin’s price goes up by a little over 12%, as much as $20 billion (€18 billion) in short positions could be liquidated if the price reaches $72,600. When this happens, many investors would have to buy back their Bitcoin to limit losses, which would push the price up even further. That’s why $72,600 has become a battleground between the bears, who are betting on a decline, and the bulls, who believe in more gains. The dip we saw today gives the bears a bit of hope, but everything could change in an instant.
If Bitcoin breaks through this level, it could trigger a chain reaction that might impact the entire market.
How Short and Long Trading Works
To understand what’s happening, it’s helpful to know how short and long positions work. When you “short” Bitcoin, you are essentially betting that its price will go down. You borrow Bitcoin, sell it at the current price, and then hope to buy it back at a lower price, pocketing the difference. On the other hand, taking a “long” position means you believe the price will rise. You buy Bitcoin, hoping that you can sell it later for a profit. When the market leans heavily in one direction, like we see now with many short positions, any unexpected price movement can lead to forced buying or selling, amplifying those price changes.
Bitcoin Flowing In and Out of Exchanges
Another sign that a big move could be on the horizon is the amount of Bitcoin flowing into exchanges. According to data from IntoTheBlock, shown in the above graph that we borrowed from them, the net inflow of Bitcoin to exchanges has jumped by over 13%.
More Bitcoin on exchanges often means that people are preparing to sell. But there’s also another possible reason—investors could be getting ready for a price increase and want to have their funds in place to act quickly. The fear of missing out (FOMO) on potential gains could be driving this trend.
Either way, this increase in activity shows that many investors are bracing for a bigger market move. If Bitcoin breaks past the $72,600 resistance level, we might see a price rally.
Long Positions Dominate
Meanwhile, other data suggests that the bulls are currently in control. Information from CryptoQuant shows that investors with long positions now dominate the market. They’re even willing to pay extra costs to short sellers just to keep their positions open. This kind of behavior shows confidence in a price rise.
Historically, when we see this kind of determination from the bulls, it often means a price increase is likely. The funding rate—the cost paid by those holding long or short positions—also supports this view. As long as the bulls are willing to pay these costs, it suggests they’re confident in further price gains.
A Big Move Ahead?
If Bitcoin manages to break through the $72,600 mark, it could trigger a massive liquidation of short positions, pushing the price even higher. With more Bitcoin flowing into exchanges and the bulls holding strong, the market seems to be gearing up for a big upward move—despite the dip we saw today that has brought Bitcoin to $64,230, down 2% over the last 24hours.
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