Bitcoin

August 22, 2025 at 18:00

Bitcoin short liquidations amid $116,995.20 rally cue

I’m noting a BTC move where shorts were liquidated around $201K at a price of about $116,995.20. This kind of liquidation activity can signal short-term bullish pressure as leveraged positions unwind, potentially fuelling a rally or at least trapping bears into a squeeze. I’ll be watching how price action reacts in the near term and whether this liquidations spike translates into sustained momentum or a quick pullback.

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Analysis

Bitcoin’s liquidation of short positions at a high notional level suggests a demand-driven unwind of bearish bets. When a large amount of short exposure is cleared, there is often a temporary shift in market sentiment toward the bulls, especially if price holds above key support zones after the squeeze. The price level of $116,995.20 could act as a reference point for near-term resistance or a test of a new intraday high, depending on macro liquidity and on-chain activity.

Key factors to monitor include the breadth of the short-covering move (are multiple exchanges showing synchronized liquidations?), continuation volume, and any accompanying on-chain signals such as exchange reserve changes or long-term holder activity. If price consolidates above nearby moving averages and sustains above initial resistance, the scenario favors a continuation rally. If the move lacks follow-through, a pullback to established support could occur, inviting new entries for bears or bulls depending on risk appetite.

In a broader context, BTC’s risk-reward remains tethered to macro liquidity, regulatory signals, and evolving trader positioning. Short liquidations alone do not guarantee a durable up-move; they should be weighed alongside trend indicators, momentum metrics, and potential catalysts (adoption news, network fundamentals, or macro shifts).

Recommendation

Trading stance: Wait for clearer confirmation before placing aggressive bets. If price sustains above the immediate resistance and displays expanding bullish volume, consider staging a measured long with defined risk controls (e.g., stop below recent swing low). Conversely, if price quickly retraces and fails to hold above key support, reduce exposure and reassess with a tighter stop.

Risk management: Use incremental position sizing to avoid overexposure to a single liquidation-driven move. Maintain awareness of potential volatility spikes around liquidity events and macro news that could reverse the squeeze. Consider hedging equity or futures exposure if you’re operating with leverage, and set predefined profit-taking and stop levels tied to concrete price targets.

Timeframe guidance: Short to near-term perspective favored until a durable directional signal emerges. Re-evaluate on a break of critical levels (either sustained support or a break above resistance) with updated volume and on-chain context.

Disclaimer

The Analysis and recommendations provided are for informational purposes only. Any investment decisions should be made at your own risk. Past performance is not indicative of future results. Always conduct your own research and consider consulting with a financial advisor before making any investment decisions.