Bitcoin could test $90,000 after shorts get squeezed, but traders warn leverage is building

Roughly $750 million in bearish crypto derivative positions were liquidated as bitcoin cleared $82,000 , a level that capped prices since August, CoinGlass data shows. When short positions are liquidated, exchanges execute buy orders to close them, adding fuel to an already upward market.

“Bitcoin up 5% this morning due to short perpetual futures contracts being liquidated,” Schwab’s head of crypto research Jim Ferraioli told CoinDesk.

Meanwhile, futures open interest (the value of outstanding derivatives bets) rose even faster than bitcoin's price.

Since the breakout, about $2 billion in new leveraged exposure has been added, according to Coinalyze data , suggesting traders are pacing fresh bets even as shorts got wiped out.

While the rally has been fueled by a mix of renewed ETF demand and short covering, crypto-native positioning has been slower to shift from bearish to bullish, according to crypto analytics firm Nansen’s senior research analyst, Nicolai Sondergaard.