Bitcoin Price News: BTC Risks Drop to $66K as Liquidations Surpass $6bn

Bitcoin (BTC) has gone down by 19% in the past 30 days after dropping from a local peak of $95,000 to $75,000 recently.

This is a key support level to watch for the token as it bounced back from it in April last year in a move that ultimately catalyzed BTC’s push to a new all-time high.

However, the selling pressure has accelerated lately, and it is growing stronger by the day, according to data from CoinGlass.

Daily Crypto Liquidations – Source: CoinGlass

Daily long liquidations recently surged to $2.4 billion on January 30 and barely made it to the top 10 of “worst days” for the top crypto.

However, zooming back to the past few days, the latest decline has effectively flushed out over $6 billion, wiping out millions of long positions in the process as President Donald Trump’s pick for the top seat at the Federal Reserve was greeted with extreme skepticism.

Short Positioning Increases – One-Sided Market Could Set the Stage for a Short Squeeze

Open interest (OI) data from the futures market has been rising lately. When expressed in BTC, traders’ exposure to the token has increased from 640,000 tokens to a peak of 719,000 on January 29.

Open Interest in Bitcoin Futures (in BTC) – Source: CoinGlass

Since this OI spike is taking place during a pronounced downtrend, it seems that the market is positioning for a sustained drop. This could increase the odds of a short squeeze as the market, once again, is getting increasingly “one-sided”.

Traders are not the only ones “pulling the plug” on BTC, as investors have also pulled out a combined total of $20 billion from U.S.-listed exchange-traded funds (ETFs).

Data from The Block shows that the AUM of all spot ETFs linked to the top crypto (excluding Grayscale’s GBTC) declined from $120 billion in mid-January to $98 billion at the time of writing.

This growing skepticism could build the foundation for the beginning of a bull market, as sentiment is getting “too pessimistic”.

The Fear and Greed Index has hit 15 for the fourth time in the past 12 months. On previous occasions, extreme panic readings like this have been followed by a strong uptrend, fueled by massive short squeezes.

Contrarian Signals Pile Up, But No “Buys” Have Flashed Yet

Despite these contrarian signals, a bottom is not yet “in” based on what the charts say. The daily chart does show that buyers have been showing up to keep BTC above $75,000 – and for a good reason.

BTC/USD Daily Chart (Bitstamp) – Source: TradingView

If the top crypto drops below this mark, the most likely near-target would be $66,000.

That’s not gonna make Michael Saylor happy, that’s for sure.

On the opposite side, if the market begins to recover, the odds of a short squeeze playing out are high, considering how OI has expanded.

Traders are positioned for further downside, and that could push BTC back to $85,000 easily if these positions get blown up by a strong uptick.

Trading volumes indicate that $75,000 is a heavily contested area as $70 billion worth of BTC has exchanged hands in the past 24 hours, corresponding to 5% of the token’s circulating market cap.

We are still operating under a sell signal in the daily chart, so this is not yet the time to enter a long position. However, keep your eyes open, as a strong reversal could rapidly turn this downtrend into an explosive uptrend in a heartbeat as short positioning increases.