Bitcoin Up 83.6% Gains as $15 Billion Leverage Racks Up: Volatility Ahead?

Key takeaways

Is Bitcoin Poised for a Major Price Movement?

Yes. With $2.7 billion in shorts and $1.1 billion in longs accumulated near the levels at the time of this publication, BTC is in a tight range.

What does earnings data say about market sentiment?

Around 83.6% of Bitcoin supply is now generating profits, but you need to watch out for overheating above 95%.

With most holders sitting on profits and traders accumulating both long and short positions, Bitcoin [BTC] you may be ready for a big move. Around $2.7 billion in shorts and $1.1 billion in longs are accumulating near the press time price, creating a tight zone of tension.

Whether Bitcoin rises or falls next, a major price swing could be around the corner.

Increased profits mean confidence

Bitcoin supply generates profits went up to around 83.6%, meaning the majority of holders are now back in the green. This metric often serves as a useful way to gauge market sentiment.

Right now, it means that the market supports Bitcoin.

Source: Cryptoquanto

Typically, when BTC’s profit share remains between 80% and 90%, the market tends to continue expanding as holders are reluctant to sell.

While the level at press time looked healthy, traders should watch for signs of overheating once it breaks above 95%, a zone that is often followed by market corrections.

Source: Glassnode

In support of this view, both spot and futures CVD flattened for the first time since the October 10 wave. This suggests that the aggressive selling pressure has finally subsided and the market has also regained its balance.

A big step forward

Bitcoin, at the time of writing, was trapped between areas of strong liquidation: the perfect setup for a possible breakout. Around $2.7 billion in short positions are accumulating just above levels at the time of this publication, reaching as high as $117,000. On the contrary, there are 1.1 billion dollars in long positions below, up to 113,700 dollars.

Source: X

Beyond these levels, the pressure begins to increase. About $15.35 billion in shorts extend up to $126,400, while $10 billion in longs accumulate up to $104,400. This setup puts BTC in a tight, high-risk leverage range.

Even a small price movement could trigger a wave of liquidations. The market remains stagnant and a major move could trigger the next phase of volatility.