Bitcoin shows signs of local bottom as short liquidity clusters form

Cumulative short positions all the way up to $113,000 may spark a relief rally for BTC. The leading coins is showing signs of reaching a local bottom, with speculations of a further recovery. One of the chances for a BTC recovery may be a short squeeze, liquidating positions up to $113,000. Liquidity is rebuilding on the upside, which has historically led to rapid rallies. BTC is rebuilding short liquidity, which led to a rapid recovery back above $103,000. | Source: Coinglass The presence of short liquidity does not guarantee a price rise, but may become a key factor for expanding the price of BTC, at least in the short term. BTC open interest recently recovered by $1B in the past day, rising to $33.52B. Over 71% of BTC positions are long on average. Hyperliquid is the exception, with over 43% of whales taking up short positions. The accumulated short liquidity has been high for a few days, but it does not guarantee a non-stop climb. In October, short liquidity went as high as $130,000, but there was no significant short squeeze. On the downside, BTC may sweep the long positions, especially the high-leverage cluster around $100,500. BTC still trades with extreme fear BTC still trades with extreme fear, as the index moved up to 23 points from a recent low of 21 points. The leading coin also trades with the highest volatility for the past six months, at 1.98%. The coin remains unpredictable, with expectations that the recent downturn may end. BTC has still not lost its ascending channel and has not shown signs of a bear market, but its price fluctuations still cause concerns. BTC dominance is at 58.4%, due to the underperformance of altcoins, rather than the inherent strength of Bitcoin. Is the BTC price forming a local bottom? BTC showed its ability to bounce, suggesting the $100K range served as the local bottom. BTC bounced from its weekly lows, avoiding a breakdown under $100K. Trading is still fearful, but the coin showed its ability to bounce in a short time frame. | Source: Coingecko Soon after forming a high-leverage short position cluster up to $105,000, BTC rallied again. Within a short timespan, the price recovered to $103,743.15, sparking a market-wide bounce from recent lows. The BTC recovery boosted ETH as well, as the token returned above $3,400. The move immediately caused $5.9M in short liquidations for BTC, and $9.6M in ETH short positions. While this is only a small fraction of available liquidity, the short squeeze was at least partially realized. On a four-hour basis, BTC saw $18.33M in short liquidations. On a 24-hour basis, long liquidations still dominated, with over $300M in BTC longs liquidated. There are other signs of a market bottom. Short-term holders have completed another round of capitulations . There are also signs of increasing whale spot orders, while ETFs returned to buying more BTC. The recent market downturn is seen as a shift in sentiment, and not a breakdown of the general bullish trend. Don’t just read crypto news. Understand it. Subscribe to our newsletter. It's free .