Bitcoin bears face short squeeze risk as price rises above $43,000, analyst says

Bitcoin short leveraged positions are vulnerable as the digital asset surpasses the $43,000 mark, with a number of positions being liquidated. Following bitcoin’s breakthrough beyond the $42,000 mark on Monday, the world’s largest digital asset by market capitalization cruised past $43,000 for the first time in more than a year on Tuesday. A significant number of leveraged positions have been liquidated as a result. BTC +5.14% M Chief Economist Youwei Yang identified $45,000 as the next crucial resistance level for the digital asset, suggesting an elevated likelihood of a short squeeze above this threshold. “The bears may be facing a short squeeze risk of bitcoin topping the next key resistance level of $45,000,” Yang told The Block. He added that there is currently a high level of leveraged positions that could be wiped out if the market becomes increasingly volatile. “There is now a likelihood of higher market volatility of both short squeeze and long liquidation within a short period of time simultaneously,” Yang continued. Coinglass data shows a high level of liquidated leveraged positions in the cryptocurrency market over the past 24 hours.

Bitcoin’s ‘bullish catapult’

Analysts from Bitfinex pointed to two BTC price levels that have seen a significant amount of liquidations given the recent market volatility. “Currently we can see large short liquidations at $41,950, and then at $42,200,” Bitfinex analysts told The Block.

Above these levels Bitfinex, the analysts said that the bitcoin price could experience “a bullish catapult” due to forced liquidations when shorts are forced to buy in order to close their trades.

Bitcoin was up 4.3% on Tuesday, trading for $43,321 at 12:27 p.m. ET.

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