Bitcoin broke through $66,000 this morning, testing the previous high at the end of September, driven by the liquidation of short positions. At the same time, the DeFi liquidation volume reached its second-highest level in three months, and the inflow of stablecoins into exchanges signaled a bullish trend. However, there is still a significant amount of sell orders above the September high, and Bitcoin has not clearly broken the downward trend. Market volatility is expected to continue, and there may be downward pressure.
In the early morning of today, Bitcoin once again broke through $66,000, reaching a high of $66,500, testing the previous high at the end of September. After briefly breaking the downtrend line, the market is closely watching whether the upward momentum can continue to break through the resistance level or if it will pull back again.
One major factor in Bitcoin’s 6.9% increase within 8 hours is the liquidation of short positions. According to a report by Dynamic Zone, if Bitcoin breaks through $65,000, mainstream centralized exchanges will liquidate $396 million worth of short positions. According to Coinglass data, the cryptocurrency market saw over $240 million in liquidations in the past 24 hours, with short positions accounting for $208 million. This is also reflected in the surge in funding rates.
Additionally, according to data from Santiment, during this rebound, Bitcoin’s DeFi liquidation volume reached its second-highest level in over three months. This is worth noting because the last time such a large-scale liquidation occurred, Bitcoin experienced a 20-day, 29% price increase. If history repeats itself, this could be a strong bullish signal indicating further price increases.
With Bitcoin temporarily rising above $66,000, Santiment stated in a post early this morning that investors are looking for opportunities in the GameFi and memecoin sectors. They believe that historically, this is a sign of improved market sentiment.
In this context, many traders are betting on the possibility of Bitcoin breaking through the $70,000 mark. JJ, the director of cryptocurrency options and derivatives at HighStrike, stated:
The inflow of stablecoins into exchanges also shows positive signs. According to Santiment, the inflow of USDT to exchanges has slightly rebounded, and the inflow of stablecoins to exchanges is usually an important driving force for a sustained market rebound. It is recommended to continue monitoring whether this trend continues.
Looking ahead to the future of Bitcoin, JJ warned that there is still significant resistance above the September high due to the accumulation of sell orders on Coinbase’s order book. He further pointed out:
In addition, Bitcoin’s performance in the fourth quarter is expected to be influenced by macroeconomic factors such as the US presidential election and interest rate cuts by the Federal Reserve. This is worth continued attention.