Key Points
- Bitcoin short positions worth $106 million were liquidated as the cryptocurrency’s price surged.
- The surge in Bitcoin’s price has led to “Extreme Greed” market sentiment, raising fears of a possible correction.
Bitcoin [BTC] is on the verge of reclaiming its previous all-time high, indicating a strong recovery from the bear market lows of late 2022.
In the past 24 hours, the world’s largest cryptocurrency, Bitcoin, breached the $68k mark before profit-taking brought it back to the $67k region, as per CoinMarketCap data.
Bitcoin Short Positions Liquidated
This increase led to the liquidation of $106 million worth of Bitcoin short positions within the same timeframe, as per data examined from Coinglass.
The move also pushed Bitcoin network’s profitability to a perfect 100%, according to Santiment data.
On average, Bitcoin holders saw nearly 20% unrealized profits on their investments, as indicated by the 30-day MVRV Ratio.
Market Sentiment and Future Predictions
However, it’s important to note that high profitability often encourages selling, which could potentially halt Bitcoin’s rally.
Moreover, the Bitcoin Fear & Greed Index hit 90 for the first time in two years, indicating “Extreme Greed” market sentiment and increasing the possibility of a strong correction.
Short-term investors, commonly known as “weak hands”, often contribute to price volatility.
A CryptoQuant author highlighted a recent surge in new investors entering the Bitcoin market, suggesting that such levels were last seen during the early bull market period of the last cycle.
The author also suggested that an increase in short-term investors could lead to significant price corrections in the near term. However, he advised investors to maintain a bullish stance during these periods, predicting that Bitcoin is “likely to rise to near $120K after the correction.”
Despite high unrealized profits, most Bitcoins have been steadily moving out of exchanges. This indicates that investors are not eager to sell, but are instead accumulating for higher future gains.
