Bitcoin Faces $4B Short Squeeze as It Approaches $80K
By John Nada·May 22, 2026·2 min read
Bitcoin nears $80K, threatening $4B in short liquidations. Futures activity drives the rally; spot demand lags.
Bitcoin's landscape has dramatically shifted, as a liquidity imbalance looms near the $80,000 mark. A staggering $4 billion in short positions teeter on the edge of liquidation, driven by Bitcoin's recent defense of the $76,100 support over two days, according to Cointelegraph.
On the one-hour chart, Bitcoin's movement revealed a bullish divergence from the relative strength index (RSI). This, coupled with higher lows near $76,100, signals a stronger buying position. A retest to $78,000 on Thursday further solidified this support base, illustrating a potential bullish breakout.
The narrative unfolds beneath a descending trendline, where Bitcoin seems to be forming an inverse head-and-shoulders pattern. This suggests diminishing bearish pressure, implying a possible leap into the fair-value gap between $79,500 and $80,300 — a zone of low liquidity born from a past selloff.
CoinGlass illustrates that leveraged risks concentrate heavily above current price levels. A rise towards $80,000 could trigger billions in short liquidations, positioning short sellers under more pressure than their bullish counterparts. In contrast, a dip to $75,000 would primarily affect long positions, exposing $3 billion in potential liquidations.
Intriguingly, Bitcoin's futures market activity has overshadowed spot trades, with CoinGlass recording 103,963 trader liquidations amounting to $286.08 million in total, with short positions shouldering $175 million of that. The largest single hit was on Binance’s BTCUSDT pair, at $3.04 million.
CryptoQuant's data reinforces this narrative, with open interest dropping to 116,800 BTC from 120,000 BTC. This decline points to traders retracting their leveraged positions amid recent volatility, indicating a more controlled derivatives market rather than wild speculation.
Spot market activity, meanwhile, has lagged behind, with the aggregated spot cumulative volume delta (CVD) at a negative $483 million. Conversely, futures CVD turned marginally positive around $34 million, and elevated funding rates hint at a short-term bullish outlook. While spot market interest wanes, leveraged traders are evidently steering Bitcoin's upward journey. All eyes now fix on the $80,000 threshold, the next critical battleground for Bitcoin's relentless ascent.