Liquidity Builds Above Bitcoin (BTC) Price—Bearish Signal or Short Squeeze Setup?

The post Liquidity Builds Above Bitcoin (BTC) Price—Bearish Signal or Short Squeeze Setup? appeared first on Coinpedia Fintech News

The recent rally in gold and silver has paused after strong upside momentum, coinciding with increased volatility across equities and crypto markets. Bitcoin posted its second consecutive bearish daily candle, briefly dipping toward the $81,000 level before recovering part of the losses. While short-term buying interest has emerged, the broader price structure continues to reflect downside risk. This is keeping concerns of a deeper pullback intact.

In this context, liquidation data becomes a key analytical tool. Liquidation clusters and leverage positioning help identify potential pressure zones. They also reveal whether market participants are positioning defensively or preparing for continuation moves. This data-driven view provides clearer insight into Bitcoin’s likely next price action than sentiment alone.

Liquidity Heatmap Highlights Key Pressure Zones for Bitcoin Price

Bitcoin price has entered a consolidation phase after an early-2026 pullback, with price briefly testing the $81,000 before stabilising. Despite a partial recovery, derivatives data continues to signal elevated risk around key levels. Open interest remains near $58 billion, while recent sessions saw long liquidations dominate short-side exits. With spot price trading below major liquidation clusters, short-term price action is increasingly driven by leverage positioning rather than spot demand.

The liquidation heatmap shows a dense concentration of leveraged positions above the current Bitcoin price, with the largest cluster forming near $98,000, holding over $300 million in potential liquidations. Downside liquidity below $82,000 appears comparatively thin, indicating much of the sell-side leverage has already been cleared. This imbalance suggests volatility is skewed toward upside tests, though failure to regain momentum could keep the price range-bound until leverage rebuilds.

$98,000 Emerges as a Critical Liquidity-Driven Zone

If Bitcoin (BTC) price advances toward the $98,000 level, liquidation heatmap data suggests a sharp increase in volatility rather than a clean breakout. The zone hosts over $300 million in leveraged positions, making it a high-probability liquidation trigger. A move into this area could force the unwinding of overleveraged positions, generating rapid buy-side orders and increasing the risk of a short squeeze. However, once this liquidity is absorbed, price behaviour will depend on sustained spot demand. As such, $98,000 should be viewed as a liquidity turning point, not a confirmed resistance or support level.