Bitcoin is currently making strides toward breaking a significant resistance barrier at $120,000 as it aims for new record highs. Despite attempts by bearish traders to defend this price level by increasing short positions, these actions could inadvertently trigger a short squeeze, thereby propelling prices higher.
The altcoin market is also witnessing a positive trend, albeit with less volatility compared to previous upward movements. Major cryptocurrencies such as Ethereum (ETH), Solana (SOL), and XRP have each risen over 2%, while smaller-cap tokens like ETHFI and CAKE have surged by 15% and 25%, respectively. This growth occurs as Bitcoin, the largest cryptocurrency by market cap, approached the $120,000 mark, eyeing a breakthrough past $124,000 in its quest for new highs.
In the derivatives market, Bitcoin futures are exhibiting a strongly bullish stance, maintaining open interest at an all-time high of over $32 billion. The three-month annualized basis is nearing 8%. However, a notable divergence in funding rates has emerged, with Deribit’s figure soaring to 25% while other platforms like Bybit present a more neutral stance. This disparity suggests that aggressive long positions may be concentrated in certain exchanges.
The Bitcoin options market appears to be in a state of equilibrium. The 24-hour put-call volume is slightly skewed toward calls at 52.25%, although this represents a decline from previous days, hinting at a potential softening in bullish sentiment. Additionally, the 1-week 25 delta skew has leveled off at 0.33%, indicating a balance in implied volatility between puts and calls. These metrics suggest that the market is entering a more cautious phase after a period characterized by strong bullish activity.
According to Coinglass, $380 million in liquidations occurred within a 24-hour timeframe, split 35-65 between long and short positions. The Binance liquidation heatmap identifies $121,300 as a critical level to watch for possible liquidations in the event of a price increase.
While Bitcoin makes its move, the relative stability around its current prices is expected to benefit altcoins, which typically thrive during Bitcoin’s consolidation periods, allowing capital to flow into more speculative options. However, the upward momentum has not been favorable for all tokens; MYX experienced a staggering 43% drop due to a rapid liquidation of leveraged positions. Additionally, Plasma’s XPL token continues to struggle amidst rumors of shorting activities by market makers on behalf of the founding team, a claim that has been firmly denied by XPL’s founders.
