Bitcoin bulls managed to push price back above $100,000 in the last 24 hours, for the first time since early February. However, the circumstances behind the momentum paved the way for a massive surge in liquidations.
Bitcoin has been recovering since it bottomed out in April and has extended the same momentum so far this month. Its momentum was particularly evident in the last 24 hours, during which price surged by almost 4% from sub $97,000 levels.
The cryptocurrency exchanged hands at $101,048 at press time, after a brief struggle with resistance just below this key price point, before the bulls eventually won. However, this latest move also triggered a significant surge in liquidations.
Almost $200 million worth of shorts were liquidated in the last 24 hours. In contrast, only $20.36 million worth of long positions were liquidated during the same period. This ratio of shorts suggests that there were heavy bearish expectations.
The short liquidation figures in the last 24 hours were the highest observed in the last 2 weeks. The reason for the high liquidations is perhaps even more interesting.
Investors have been expecting a rate cut but the Federal Reserve revealed that rates would remain unchanged during Wednesday’s FOMC meeting. This may explain the surge in bearish expectations especially considering that BTC was already overbought.
FED’s Treasury Bond Purchase Boosts Bitcoin Bulls
Bitcoin bulls may have also received a confidence boost courtesy of recent reports which revealed that the FED was pumping more liquidity into the economy. The financial authority reportedly acquired a total of $34.8 billion worth of treasury bills this week.
This confirmed that market liquidity was growing at a time when the FED has been trying to balance the economy and keep inflation in check.
Interestingly, this new purchase aligned with the upside observed in the M2 money supply. The latter recently pushed to a new historic high of $21.76 trillion.
The FED’s recent treasury bills confirmed the accelerating liquidity inflows. Bitcoin has arguably been getting a slice of that liquidity pie, and its aggressive recovery from April lows reflects that observation.
Rising M2 money supply also highlights the growing risk of runaway debt potentially leading to long term fiat value erosion. Such an outcome supports the long term bullish outlook but may not necessarily shield Bitcoin from short term headwinds.
Weekly Demand Demonstrated Cooling Sell Pressure
A bearish retreat may have aided the bullish outcome. Spot outflows were highest at just over $832 million on 4 May, but have been declining since then. They switched in favor of positive flows in the last 24 hours, with about $69.72 million worth of inflows.
Interestingly, the positive spot flows were preceded by positive ETF flows 24 hours prior. A sign that institutions responded positive to news that rates would remain unchanged.
Can Bitcoin still maintain the momentum above the $100,000 mark? The market demonstrated a sell wall just below shy of that key price point, which suggests that there was a significant amount of profit-taking.
The fact that Bitcoin was still overbought at press time levels could indicate that sell pressure may still make a strong comeback and push price below $100,000. On the other hand, it is possible that one Bitcoin overcomes the sell wall, it could continue rallying, driven by FOMO and demand induced by a short squeeze.
Meanwhile, a Standard Chartered analyst that previously called for a $120,000 price target in 2025 has reportedly revised the target.
The analysts reportedly stated that the target was too low. This signals that even institutional expectations of Bitcoin price in 2025 have been improving along with a brighter disposition also observed in the whale category.
Source: https://www.thecoinrepublic.com/2025/05/09/bitcoin-short-liquidations-surge-as-price-hits-100000-after-defying-fomc-concerns/