Uncovering How a Specific Group Propelled Bitcoin Over $60k Mark

Key Points

• Bitcoin’s recovery may be due to the liquidation of over $2.5 billion worth of leveraged short positions.
• A shift towards bullish optimism is suggested by an increase in net longs on Binance and an improving market sentiment.

Bitcoin [BTC] has once again crossed the $60,000 mark as market sentiment begins to improve. The liquidation of leveraged short positions, reportedly worth more than $2.5 billion, could be a contributing factor to this slight bullish outcome.

Over the weekend, the overall sentiment in the cryptocurrency market was one of extreme fear. However, there has been a noticeable recovery in the past three days.

Market Indicators and Trends

The fear and greed index, a popular market sentiment indicator, shows a gradual recovery with a current reading of 30. This rising sentiment, combined with the liquidation of leveraged short positions, may have boosted Bitcoin’s bullish momentum.

Data from CryptoQuant reveals a 231% surge in short liquidations for Bitcoin on August 12. Following this, the appetite for leverage briefly hit a two-month low before beginning an upward trend.

An analysis of Bitcoin’s heatmap shows 81.5 million net longs on Binance between $60,852 and $60,880. This, along with the increasing estimated leverage ratio and improving sentiment, indicates a shift towards bullish optimism.

Bitcoin’s Future Volatility

As of press time, Bitcoin’s price stands at $60,890. If it continues to rise, it could retest the $61,700 level, where it has recently faced resistance and low demand.

This price range coincides with the 50% RSI level, which may explain why short positions are increasing in anticipation of a potential downturn. However, a combination of low demand and short liquidations has resulted in a narrow price range over the past few days.

Market activity typically decreases before the release of major economic data and surges in reaction to the data’s release. With multiple economic data sets due to be released this week, including CPI data, the market may experience further volatility and potentially a strong directional move.

Bitcoin’s current position reflects the market’s uncertainty. The increase in leverage short positions points to growing bearish expectations. However, the improving market sentiment over the past few days suggests a possible rally beyond the current resistance.