Are Bitcoin Bears Facing Losses? $31 Million Cleared from BTC Short Positions

The Bitcoin price struggled to maintain its upward momentum following its peak of $108,786 in January, resulting in a decline to approximately $74,000 in the ensuing months. Nevertheless, the leading cryptocurrency seems to be experiencing a resurgence.

While Bitcoin currently trades comfortably above the significant six-figure mark, a pressing question remains — is the upward trend genuinely reestablished? Recent analysis of on-chain data indicates that the market leader might be gearing up to restart its bullish trajectory.

Binance Sees Largest Short Liquidation Since April

A post on CryptoQuant from a pseudonymous analyst named Darkfost indicated that a substantial number of short positions were established on Binance during Bitcoin’s descent from its all-time high. The analyst noted that this facet of the derivatives market contributed considerably to the selling pressure experienced by BTC in the following months.

Darkfost elaborated that as BTC’s price began to recover, these short positions were gradually liquidated, creating buying pressure for the cryptocurrency. Notably, there was a significant spike in liquidations on May 8, reaching a new single-day high not seen since March.

CryptoQuant’s data shows that more than $31 million in short positions were liquidated on Binance, the largest exchange by trading volume. The accompanying chart illustrates the on-chain metric for liquidations in USD, specifically the ‘Short Liquidations USD’ metric.

Additionally, Darkfost pointed out that the funding rates are relatively low, hovering around 0.004. This trend indicates a notable prevalence of short positions in the market, as well as a reluctance among Binance traders to engage in long positions.

Darkfost concluded that additional liquidations or closures of these short positions could enable Bitcoin’s bullish trend to regain its strength, potentially leading to further appreciation of the cryptocurrency. The analyst also mentioned the possibility that this regained bullish strength could help Bitcoin surpass its previous all-time high.

Bitcoin Price Overview

Currently, Bitcoin’s price is approximately $104,335, marking an increase of over 1% in the last 24 hours. Data shows that the cryptocurrency has appreciated by nearly 9% over the past week.