The latest Bitcoin (BTC) price pump, which has seen the world’s largest cryptocurrency rally into the mid-$30,000s per token, has obliterated millions worth of short positions.
Indeed, in the last two days, $107 million worth of Bitcoin futures short positions have been liquidated across major cryptocurrency exchanges, according to crypto derivatives analytics website CoinGlass.
Around $60 million in short position have been liquidated on Tuesday alone, the highest daily tally since the 16th of March.
A separate chart presented by CoinGlass shows that bulls are gaining the upper hand when it comes to demand for Bitcoin futures leverage.
The Bitcoin futures leverage funding rate recently rose to 0.03% on decentralized cryptocurrency derivatives exchange dYdX, its highest level since the end of March.
A positive funding rate means that traders opening leveraged long positions are paying funding to those opening leveraged short positions, indicative of a higher degree of demand for the latter position rather than the former.
Bitcoin options markets also point to a bullish lean.
According to data presented by The Block, the 25% delta skew of Bitcoin options expiring in 7, 30, 60, 90 and 180 days are all above zero and not far below their highest levels for the year.
A skew of above zero suggests that investors are paying a premium for bullish call options versus their mirror opposite call option counterparts.
This is the Key BTC Price Target to Watch
The latest Bitcoin price pump appears to have been catalyzed by short-term technical developments, including the recent breakout from a multi-week pennant formation.
Other technical observations such as 1) the fact that BTC had continually found support at its 21DMA in recent days, 2) all the major moving averages are moving higher in ascending order, 3) the recent strong bounce from the 200DMA midway through March and 4) the “golden cross” from early February all add to the reasons why the BTC price has been pushing higher.
While the risk of profit-taking is rising in wake of the 14-Day Relative Strength Index (RSI) rising back into “over-bought” territory, bulls will now have their sights set on the next major bullish target in the $32,500 area.
These are the highs from late May 2022 and also roughly coincide with the January 2022 lows.
Will Macro Spoil the Party?
Bitcoin’s strong start to the week comes ahead of the release of a barrage of key US data points on Wednesday, Thursday and Friday.
Those include the latest Consumer and Producer Price Index reports, the latest Retail Sales report and the preliminary version of the April University of Michigan Consumer Sentiment survey.
These data releases, alongside the release on Wednesday of the minutes from the latest FOMC meeting of Fed policymakers, could significantly alter expectations relating to US growth and the Fed’s interest rate outlook.
That could impact crypto prices in a big way.
If this week’s data pushes back against the narrative that the Fed will start a rate-cutting cycle later this year (i.e. if inflation data is hotter than expected and other data reveals the US consumer to still be in good shape), this could push up the US dollar and US yields and weigh on Bitcoin, potentially sending it sharply back under $30,000.
On the other hand, if this week’s data shows that 1) inflation continues to fall rapidly and 2) that a US recession later this year is getting increasingly likely, this could support Bitcoin, if it triggers fresh weakness in the US dollar and yields.
This news is republished from another source. You can check the original article here.