- Coinglass heatmap reveals dense liquidity pools in $90K-$96K range, positioning shorts for squeeze if BTC breaks higher.
- $120M short liquidations on Dec 17 fueled $90K spike/reversal; $584M total crypto liqs signal volatility.
- $23B Bitcoin options expire Dec 26 with spiking IV, amplifying squeeze risks for bearish positions.
The ever-volatile world of cryptocurrency, Bitcoin (BTC) is once again capturing attention with signs of building tension in the futures market. According to a recent liquidity heatmap from Coinglass, shared by prominent crypto analyst Coin Bureau on X, significant clusters of liquidity are accumulating above the $90,000 mark.
This visualization, depicting price action from December 6 to 19, highlights a colorful gradient of trading activity, with a red circle emphasizing the dense buildup in the $90K-$96K range. As the market leans heavily short, this setup could be the precursor to a classic short squeeze, where forced buying by underwater shorts propels prices higher.
$120M Short Liqs Fuel Volatility
The heatmap illustrates Bitcoin’s recent journey, starting from around $84,000 and peaking near $96,000 before dipping. The color shifts—from deep purples at lower levels to vibrant yellows and greens higher up—represent varying liquidation densities. Notably, the circled area shows a concentration of potential liquidations on the upside, suggesting that if BTC pushes through resistance, shorts could get wiped out en masse.
Coin Bureau’s post on December 19 posed the question: “Will we see a short squeeze soon?” The timing is intriguing, coming just days after a chaotic session on December 17, where BTC surged and retraced rapidly, liquidating over $120 million in shorts and briefly touching $90K.
$23B Options Expiry Amplifies Risk
This isn’t isolated volatility. Market data indicates broader pressures, including a weakening risk sentiment that pushed BTC to a three-week low, with nearly $584 million in total liquidations across crypto. Long-term holder supply has hit an eight-month low, breaking from historical patterns and adding to the unpredictability. Moreover, with $23 billion in Bitcoin options set to expire on December 26, implied volatility is spiking, potentially exacerbating any squeeze. Analysts note that while the short-term outlook remains bearish, with BTC eyeing bounces around $88K, the liquidity imbalance could flip the script.
Trading Strategy for Squeeze Plays
For traders, this scenario underscores the risks of overleveraged positions in a market still digesting macroeconomic factors like U.S. stock dips and regulatory murmurs. If the squeeze materializes, we could see BTC reclaiming higher ground swiftly. However, false breakouts are common—recall the quick reversal after the recent $90K tag. Investors should monitor funding rates and open interest closely. As Bitcoin hovers in this precarious zone, the next move could define the year’s close: a bullish explosion or continued consolidation? The heatmap says watch the upside.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.
