$970M lost: Bitcoin’s $100K surge triggers mass liquidation

• Bitcoin’s recent surge has triggered a significant short squeeze, leading to substantial liquidations.
• The market remains volatile, and investors should be prepared for potential corrections.

A green crypto market usually spells trouble for short-sellers, and Bitcoin’s [BTC] dramatic return to the $100k milestone was no different. 

In a stunning move that wiped out $970 million in leveraged positions, bearish bets were forcefully liquidated. In short, traders positioned against the rally found themselves caught in a textbook short squeeze.

The result? A bullish stampede that left the bears bruised and the crypto market basking in green glory.

A surprise rally for bulls, a shockwave for bears

On the 2nd of May, Bitcoin wicked through the $98k ceiling, teasing a breakout. However, the follow-through was anything but convincing. 

Without a strong spot bid, bulls lost momentum fast. Bears smelled blood. With shorts stacking up to 63.64% dominance in BTC/USDT perps on Binance, the setup was ripe. 

What followed was a textbook long squeeze: Open Interest flushed, longs got nuked, and BTC retraced to $94k in just 48 hours.

But fast-forward a week, and the tables turned. A brutal $970 million in liquidations marked a market-wide rebound, with the Funding Rate (FR) spiking green for its longest stretch in a month.

Evidently, Futures traders are still all-in on a BTC bull run, with long dominance at 51.64% across exchanges. The 4-hour order book screams “bullish vibes.”

But the bears aren’t out yet. On Binance, 60% of accounts are still positioned short, betting on a potential price rejection near the $103k resistance zone. 

Is Bitcoin setting up for a potential liquidity trap, repeating the same market structure from last week?

Liquidity squeezes keeping the Bitcoin bulls at bay

Cracks are starting to show. Even though BTC surged back to $104k in a quick intra-day move, Bitcoin’s Open Interest (OI) has dropped around 4.30%, now resting at $63.70 billion. 

In other words, Futures traders are already hitting the exit button, unwinding leverage and cashing out as the hype fades.

However, there’s no solid sign of spot distribution — yet. On-chain flows suggest HODLers are holding the line, eyeing higher targets. 

So, this wave of derivatives-driven sell-side pressure might just get absorbed like a dip on a bull’s radar.

In fact, if Bitcoin continues slicing through supply walls, the setup is ripe for another punishing short squeeze. That $970 million? Could just be the warm-up.

Liquidity maps highlight a dense cluster around $103,685, with $49.64 million in stacked leveraged positions. 

If bears get too comfortable, bulls might just spring the trap and rocket Bitcoin toward $105k.