BTC Liquid Data Could Push Price To New Highs: Analyst

Bitcoin (BTC)'s sharp 7.4% retracement began in the first week of January and has shifted markets' focus to futures, with liquidity data suggesting the price action may be lopsided.

Main Receptors:

More than $10.6 billion of longs settled below $84,000, compared to just $2 billion of shorts above $104,000.

A retail position on Hyperliquid shows that shorts are more susceptible to upside compression than longs in a downward move.

Bitcoin needs to recover its $100,000 cost base to confirm a structural trend reversal.

Liquidity imbalance poses a risk to BTC volatility

According to data from CoinGlass, roughly $10.65 billion in leveraged long positions could be lost if Bitcoin revisits $84,000. In contrast, if BTC reaches $104,000, only about $2 billion in short positions will face liquidation.

This mismatch is important because liquidity can act as mandatory market orders. A move lower toward $84,000 would threaten a long liquidation, accelerating selling pressure. On the upside, though, less shorts mean less fuel per squeeze unless the throttle is changed quickly.

But, on hyper fluid, the perspective is different. Crypto trader Chimpzoo highlighted that retail traders are disproportionately short, noting that the rally could wipe out about 6,000 BTC worth of retail shorts compared to 2,000 BTC retail longs with similar low activity.

Calling the setup “absurd,” the trader argued that such a setup could quickly lead Bitcoin to new highs. However, a closer look at the data suggests a more balanced risk profile. While the exchange still exhibits a net short bias, the liquidity exposure to a $10,000 price move is relatively reasonable.

With such a move, about 3,860 BTC would flow on long positions with minimal swing, compared to about 4,100 BTC on a short position on a reverse move.

Related: Is Venezuela Hiding a 600K Bitcoin Reserve? Analysts are not sure

The $100,000 level remains a critical structural challenge

Despite the liquid-driven momentum, the analyst cautioned that crypto is unlikely to move in a straight line to new all-time highs. First, Bitcoin needs to recover its cost base, which takes six to 12 months to ensure a trend reversal.

That level currently hovers around $100,000. A sustained break above it indicates a return to Bulgarian market structure and room for further reversals. The rejection suggests that the broader downtrend remains intact despite recent initial strength.

From a technical perspective, short-term risks remain below current prices. Bitcoin may retest the CME gaps created over the weekend between $90,600 and $91,600, with another gap still unfilled at lows between $88,170 and $88,700.

If BTC rejects the $96,000 resistance, these gaps could come back into play as the month progresses.

Related: Bitcoin Enters ‘Strength' Phase, But $100K Debate Heats Up Among Traders

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