On-chain analytics from Hyperliquid and Coinglass suggest that if Bitcoin climbs to $96,900, it could set off a wave of forced liquidations totaling more than $9.6 billion in short positions. This price point is close to significant resistance zones where many traders have placed leveraged bearish bets, creating a feedback loop that could intensify price swings in either direction. The situation highlights the delicate balance in the cryptocurrency market, where clusters of short positions present both risks and opportunities for those navigating the current volatility.
The most notable liquidation clusters are found between $94,354 and $114,295. For example, if Bitcoin reaches $95,123, approximately 1,140 BTC—valued at $99 million—would be liquidated. A further move to $98,356 could trigger the closure of 3,920 BTC in shorts, worth $340.5 million. Altogether, a breakout above $95,000 could result in over $900 million in short positions being forcibly closed, with even larger triggers at higher price points.
Additionally, derivatives traders have heavily positioned put options at the $90,000 and $100,000 levels, signaling a cautious approach to the possibility of further price increases.
Recent developments have heightened the urgency of this scenario. On December 1, Bitcoin briefly fell below $86,000 during a global sell-off that wiped out $140 billion from the total crypto market capitalization. This sharp decline, fueled by risk aversion and rapid liquidations, led to over $300 million in long positions being closed in a matter of hours. However, the market quickly rebounded, driven by renewed institutional interest and strong ETF inflows, which reignited bullish sentiment.
Analysts point out that Bitcoin's ability to stabilize around $86,000 and reclaim the $90,000 level demonstrates the market's resilience amid recent volatility.
These liquidation events have a significant impact on market structure. Forced closures on perpetuals platforms like Hyperliquid often spill over into spot markets, amplifying price fluctuations. For instance, the 17.7% drop in Bitcoin and 25% decline in Ethereum in October were both preceded by large-scale liquidations that triggered a domino effect.
If Bitcoin manages to break above $96,900, the resulting short squeeze could propel prices toward $100,000 or beyond. On the other hand, failing to maintain these levels could renew downward pressure and spark further declines.
Opinions remain split on whether Bitcoin can sustain a breakout. Sean Dawson from Derive notes a moderate increase in call options at the $90,000 mark, but warns of much larger concentrations at the $100,000 and $110,000 strikes. This pattern suggests that while there is short-term optimism, overcoming higher resistance levels may require additional catalysts, such as changes in the macroeconomic environment or new regulatory developments.
Meanwhile, Nicolai Søndergaard of Nansen observes that Ethereum’s crucial support between $2,400 and $2,500 coincides with significant put activity, indicating that similar dynamics are at play for major altcoins.
The broader crypto ecosystem is preparing for increased turbulence. Bitcoin’s recent rally has already resulted in a dramatic 36,380% imbalance in liquidations favoring long positions, with $8 million in shorts wiped out in just one hour. These extremes underscore the vulnerability of leveraged trades, especially as economic uncertainty lingers. While institutional investors are purchasing Bitcoin ETFs at unprecedented levels, the relationship between these inflows and potential liquidation events remains a key factor to watch.