The recent price action of Bitcoin (BTC) has been quite volatile, with over $1.78 billion in liquidations of overleveraged positions since 2021. This led to a sharp decline in the price, dropping to around $94,000 before bouncing back to over $98,000. While sellers seemed to have exhausted their positions, buyers are struggling to push the price above certain levels to validate a new upward trend.
The spot markets play a crucial role in maintaining the volatility of Bitcoin, preventing it from stagnating in a narrow range. However, derivatives have a significant impact on the current price of the asset. Traders dealing in futures or options often influence price actions through long or short liquidations. With the recent surge in long liquidations, there is a potential for liquidating shorts, which could propel the price above $100K and even reach new highs above $105K.
According to data from Coinglass, traders are betting on a further decline in the BTC price. However, if bulls manage to push the price up by another 2%, it could trigger the liquidation of nearly a billion high-leveraged shorts around $99,000, pushing the price beyond $100K.
In terms of future price rally, public companies like Marathon Digital Holdings and MicroStrategy continue to accumulate Bitcoin, with billions of dollars invested at average prices above $96,000. Additionally, Blackrock’s IBIT leads the spot ETF inflows and holds a substantial amount of BTC, indicating growing institutional interest in the token.
With institutional backing and derivative market fluctuations driving the price, Bitcoin’s prospects remain bullish, setting higher targets for the ongoing bull run. The current scenario suggests that Bitcoin’s price rally is well-supported, and there is potential for further gains in the near future.