- Bitcoin has dropped 13% recently amid miner selling and Grayscale outflows, with over $440 million in longs liquidated last week
- Over $5 billion in Bitcoin shorts could get “destroyed” if BTC sees a short squeeze above $75,000 according to analysts
- The upcoming Fed FOMC meeting could spark volatility in crypto markets depending on policy outlook and tone around inflation
The crypto markets have seen intense selling pressure recently, with over $440 million worth of longs liquidated in the past week. However, Bitcoin could be positioning for a bullish breakout that liquidates billions in shorts.
Recent Price Action and Liquidations
Bitcoin has dropped 13% over the past week amid miner selling and negative news like Grayscale outflows.
On March 19th alone, over $440 million in longs were liquidated on exchanges like Binance and OKX. Over $90 million in longs and $70 million in shorts have been liquidated in the past 24 hours according to Coinglass.
The selling pressure has been driven by news of GBTC outflows and MicroStrategy stock sales.
Billions in Shorts at Risk if Bitcoin Surges
According to analyst BitcoinMunger, over $5 billion in shorts could get “destroyed” if Bitcoin sees a short squeeze.
The analyst points to limit order heat maps showing massive resistance around $75,000. If Bitcoin can break above that level, a surge of short covering could send prices rocketing higher.
FOMC Meeting Could Spark Volatility
The upcoming Fed FOMC meeting today has crypto traders on edge. While a rate hike is largely priced in, any hawkish shift in tone could lead to panic selling across markets.
On the other hand, Bitcoin could catch bids if the Fed reiterates its commitment to fighting inflation. The policy outlook will likely impact crypto prices in the short term.
BTC remains in a precarious position, but the potential for a massive short squeeze gives bulls some hope. The market could get very interesting depending on how shorts react to the Fed.
