More than $4 billion in long positions are currently on the verge of being liquidated near $77,000 – a figure that underscores how much is riding on Bitcoin, keeping its current rate above $80,000.
The bears are still rebuilding, still burning
Data tracked by Bitcoin researcher Axel Adler Jr. shows that nearly $8 billion in brief positions have been forcibly closed since the beginning of February, with the largest single-day gain reaching $737 million on February 13.
The liquidations did not take place immediately. They appeared in three separate waves, stretching from February to April, each triggering as bear traders rebuilt positions at higher price levels – only to get caught again when the price held steady.
Daily liquidation volumes dropped to a range of $2 million to $28 million before rising again to $175 million on May 4. This jump occurred during an otherwise silent week, which pointed to recent brief exposure building near $80,000.
Reports say that the repeating pattern shows that investors are consistently betting on the price and consistently getting pushed out.
Source: Axel Adler Jr.
Adler’s trend impulse model adds context. Bitcoin in early April, it exited bear mode and entered neutral territory. Short-term momentum has turned positive, although a full bullish signal would require the 30-day straightforward moving average to break above the 200-day mark.
According to the data, every major wave of liquidations so far has occurred while the trend was in this neutral zone – a transitional phase that has repeatedly caught brief sellers by surprise.
Growing open interest increases the pressure
Bitcoins open interest across all exchanges rose 6% to nearly $30 billion in early May, the highest reading since January 31. This raise means that the market is more sensitive to sudden changes in prices – up or down.
Funding rates remain around -0.0045, which means brief side pressure is still busy while long positions are not yet crowded.
Market analyst Coin Niel reported the net exchange outflows 837 BTC on May 5, following a much larger outflow of 6,590 BTC the previous Monday.
Sustained outflows typically reflect accumulation as coins move from exchanges to private wallets, limiting the available supply for immediate sale.
Bitcoin broke the falling trend line that constrained price gains throughout April. The 100-day exponential moving average is currently just below the current price, acting as a lively floor.
The holder’s short-term cost basis is close to $81,500, a level that provides recent buyers with a profit and could further reduce selling pressure in the near term.
Supply zone ahead, with a enormous drop below
The $86,000 to $90,000 range represents the zone of prior selling activity – a group where sellers moved in during the last economic recovery and lowered the price again. This zone is another grave test for the continuation of the rally.
Featured image from Vecteezy, chart from TradingView
