Bitcoin Breaks Above September Highs, Leveraged Shorts at Risk
Bitcoin's price has been steadily climbing, reaching its highest level since September. The cryptocurrency traded above the $86,000 range on Monday, coming within $100 of its highest close in September. According to Glassnode, the largest overhead liquidation cluster for Bitcoin sits near $90,000, where leveraged shorts would be forced to close and buy back, potentially amplifying a breakout.
James Check from Checkonchain noted that futures leverage has been declining, and funding rates have remained below 4% a year. This suggests that there is limited appetite for borrowed bets, and buyers in the spot market are doing most of the work to drive the price up.
Long-term holders, who have been largely sitting on their hands, have not participated in the recent price increase. This has left buyers in the spot market as the primary drivers of the price action.
The concentration of leveraged shorts near $90,000 could have significant implications for the market. If the price reaches this level, leveraged shorts would be forced to close their positions, buying back Bitcoin and adding to the upward momentum.