Bitcoin price rises back above $42,000, causing spike in short liquidations

The price of bitcoin increased back above the $42,000 mark on Friday to a level not seen in more than a week.

The price action caused the liquidation of almost $96 million of cryptocurrency short positions, according to Coinglass data. In the past 24 hours, liquidated bitcoin leveraged positions spiked to over $41 million, with over $37 million of these being shorts.

The largest digital asset by market capitalization has increased by over 5% in the past 24 hours and was changing hands for $42,085 at 1:10 p.m. ET, according to The Block data.

Bitcoin BTC +5.86% has risen over the $42,000 mark. Image: The Block.

Today’s bitcoin uptick comes after a significant amount of bitcoin options expired on Friday. As that expiry approached, there were 94,000 bitcoin options set to expire, featuring a put-call ratio of 0.51, which is interpreted as a bullish indicator for the asset, as reported by Greek Live.

Bitcoin options open interest has declined significantly after Friday’s expiry, lessening derivatives market constraint on the digital asset.

Bitcoin price correction forecasted

Earlier in the week, BitMEX Co-Founder Arthur Hayes expressed his belief that the price of bitcoin would continue to decline. In a blog post on Tuesday, Hayes predicted a 30% correction for bitcoin, which reached approximately $48,000 immediately after the approval of multiple spot bitcoin exchange-traded funds on Jan. 10.

According to Hayes, this correction could bring bitcoin down to the $33,600 level, ultimately establishing a new support zone between $30,000 and $35,000.

“A 30% correction from the ETF approval high of $48,000 is $33,600. Therefore, I believe bitcoin forms support between $30,000 to $35,000,” Hayes wrote in the blog post.

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