Bitcoin Set for Short Squeeze as Liquidity Surges Near $120,000 Threshold

I observe that a sudden increase in liquidity indicates that Bitcoin might be gearing up for another short squeeze. As the price of Bitcoin rises above $116,700, there are nearly $18 billion in open short positions using borrowed funds, and the heat map shows a liquidation zone around $120,000, according to CoinGlass data. The chart highlights areas of highest short interest with leverage and marks zones most vulnerable to liquidation. The green curve on the right visually represents regions where short sellers face the greatest risk of being wiped out. This pattern suggests that the current liquidity spike could trigger a rapid price correction driven by short covering, especially as the market approaches the liquidation threshold around $120,000. It's crucial for traders to monitor these levels closely, as a short squeeze could push Bitcoin sharply higher before any downside move. From a trading perspective, this situation presents both risk and opportunity: cautious traders should be prepared for potential volatility around these critical levels, while aggressive traders might consider strategic positions to capitalize on a possible short squeeze in the near term.