Bitcoin falls into a liquidation squeeze: $1.29 billion in short positions versus $1.275 billion in long positions

According to the latest data, Bitcoin is at a delicate equilibrium point. If BTC breaks through $99,469, it will trigger the liquidation of $1.29 billion in short positions across major exchanges; conversely, if it falls below $90,642, it will trigger the liquidation of $1.275 billion in long positions. Currently, BTC is priced at $95,210.57, precisely between these two key levels, and the market faces clear dual-sided risks.

Market Implications of Liquidation Intensity

Sensitivity of the current price position

BTC’s current price is about $4,258 above the breakout point at $99,469 and about $4,568 below the breakdown point at $90,642. The liquidation strength at these two critical levels is nearly equal—$1.29 billion in shorts vs. $1.275 billion in longs—this approximate symmetry indicates that market participants are divided quite intensely on this range.

According to relevant information, liquidation strength is not an exact count of contracts to be liquidated but rather reflects the relative importance of each liquidation cluster compared to its neighboring clusters. Higher liquidation bars mean that when the price reaches that level, liquidity waves will generate a stronger market reaction. This implies that whether BTC breaks upward or downward, chain reactions of liquidations could be triggered.

Market sentiment is turning bearish

Although the liquidation strengths are balanced, market sentiment is tilting. Data from January 15 shows that the funding rate on mainstream exchanges has turned negative, indicating that the market is attempting to “top out and short.” This reflects that despite BTC rebounding at the key level of $97,000, investors’ short-selling enthusiasm is increasing.

Meanwhile, on-chain withdrawal data also reveals some signals. In the past 24 hours, mainstream exchanges have net outflows of 1,545.20 BTC, with Bybit outflows of 1,136.79 BTC and Coinbase Pro outflows of 912.59 BTC. Increased withdrawal activity usually indicates that holders are cautious about the market outlook or preparing for short positions.

Practical Impact of Liquidation Strength

Both levels of liquidation strength are quite substantial. Once BTC breaks any of these levels, forced liquidations will further drive the price in that direction, creating what is known as a “liquidity wave.” This is why positions with high liquidation strength often become key turning points in the market.

Focus for Follow-up

Looking upward, if BTC can break through $99,469, the liquidation of $1.29 billion in shorts could push it higher, testing higher levels. However, this requires overcoming the current market short sentiment.

Looking downward, $90,642 is a defensive line. If BTC falls below this level, the liquidation of $1.275 billion in longs could accelerate the decline, and the next support level will need to be reassessed. The current increase in withdrawals and negative funding rates indicate that market caution about downside risks is rising.

This over $4,000 range in the middle is the current “battlefield” of the market.

Summary

Bitcoin is at a delicate position with nearly equal liquidation strength on both sides, surrounded by $12 billion-level liquidation traps. The current market sentiment leans bearish, with signals like negative funding rates and increased withdrawals suggesting investors have limited confidence in an upward move. This situation means that any breakout in either direction could trigger significant liquidity shocks. The key is to watch whether BTC can break through the psychological barrier at $99,469 or fall below the support at $90,642. Any breakout could become a turning point for the next trend.