Bitcoin Nears $70,000; A 4‑3% Upswing Might Spark $600 Million of Short Liquidations
Analysts warn that a modest rally could force bearish futures traders to unwind billions of dollars of positions, while improving network fundamentals and soft‑land macro cues could tip the market back to the bulls.
Key Takeaways
- Liquidity stress: A price move to roughly $69,600—just 4.3 % above the current level—could trigger more than $600 million in forced liquidations of short BTC‑futures contracts, according to data from CoinGlass.
- Technical backdrop: The Bitcoin network’s 7‑day average hashrate has rebounded to 1,100 EH/s, erasing earlier concerns about miner exodus toward AI‑related mining.
- Security upgrade: The upcoming BIP‑360 soft‑fork proposes a post‑quantum hardening that hides public keys until spending, addressing lingering worries about quantum attacks.
- Macro environment: Weak U.S. Q4 2025 GDP growth (1.4 % YoY) and a higher‑than‑expected PCE inflation reading have dented equity appetite, while escalating Middle‑East tensions are driving investors toward alternative stores of value such as gold.
- Funding dynamics: BTC perpetual futures have posted a negative funding rate for the past two weeks, indicating that short‑side participants remain dominant, yet the rate has struggled to stay above the 6 % neutral benchmark.
Market Snapshot
Over the past seven days Bitcoin has traded in a narrow band between $65,900 and $70,500. The price action has been relatively flat, allowing short sellers to accumulate exposure while other major asset classes—particularly equities—have shown resilience. However, the market’s equilibrium appears fragile.
CoinGlass’ liquidation heat‑map model shows that a climb to $69,600 would wipe out short positions worth over $600 million. For comparison, the February 6 surge from $60,200 to $70,560 produced $385 million in short liquidations. The current price level of $66,700 sits only a few percentage points away from that trigger point, meaning a modest upside could unleash a sizable squeeze.
Macro‑Catalysts
- U.S. growth slowdown: The Department of Commerce reported that Q4 2025 GDP grew at an annualised 1.4 %, well below the consensus 2.9 %. Slower growth typically compresses corporate earnings forecasts, weakening demand for risk‑on assets.
- Sticky inflation: December’s core personal consumption expenditures (PCE) index rose 0.4 % month‑over‑month, reinforcing expectations that the Federal Reserve will keep rates elevated for longer. Higher rates tend to reduce the attractiveness of equity markets, prompting some investors to hunt yield elsewhere.
- Geopolitical pressure: Rising tensions in the Middle East have already spurred a 25 % rally in gold over the last three months, lifting its market cap to $35.2 trillion—roughly eight times larger than Nvidia’s valuation. A shift toward safe‑haven assets could benefit Bitcoin’s risk‑off narrative.
Together, these factors create a backdrop where capital may flow from equities and bonds into crypto‑based portfolios, especially if Bitcoin can break the psychological $70 k barrier.
Technical and Security Developments
Hashrate Recovery
Recent data from HashrateIndex indicates that the seven‑day average hashrate has climbed back to 1,100 EH/s, matching the levels seen in late January. This rebound dispels earlier speculation that miners might abandon proof‑of‑work for AI‑oriented mining, underscoring the resilience of the Bitcoin mining ecosystem.
BIP‑360 Quantum Hardening
The Bitcoin Improvement Proposal 360, currently slated for a soft‑fork, aims to mitigate future quantum‑computing threats. By removing the public‑key exposure inherent to the Taproot spend path and delaying the reveal of keys until the moment of transaction execution, BIP‑360 provides a backward‑compatible shield against quantum attacks. The proposal is gaining traction among core developers and may restore confidence among institutional participants wary of long‑term security risks.
Futures Funding and Positioning
BTC perpetual futures have posted a negative funding rate for the last fourteen days, signaling that short‑side traders are paying the longs to hold their positions. Yet the funding rate has not managed to stay above the 6 % neutral threshold, hinting at a waning bullish conviction. The market also witnessed $1.6 billion of liquidations during the three‑day decline that began on February 6, illustrating the volatility that can accompany rapid funding shifts.
Outlook
Bitcoin currently trades approximately 47 % below its all‑time high, offering a compelling risk‑reward profile for macro‑themed investors. While bears retain control for now—evidenced by limited demand for long positions in the futures market—a confluence of factors could prompt a short squeeze:
- Price trigger: A movement to the $69,600‑$70,000 zone would force substantial short liquidations, potentially feeding further buying pressure.
- Network confidence: Continued hashrate stability and the imminent BIP‑360 rollout may alleviate technical concerns that have previously weighed on sentiment.
- Macro shift: Deteriorating U.S. growth data and ongoing geopolitical instability could redirect capital away from traditional assets toward Bitcoin as an alternative store of value.
Investors should monitor the funding rate, liquidation heat‑maps, and macro‑economic releases closely. While the upside potential is evident, the market remains susceptible to rapid reversals, and any trading decisions should be made with full awareness of the inherent risks.
This article is for informational purposes only and does not constitute investment advice. Readers are encouraged to conduct their own due diligence before making any trading or investment decisions.
Source: https://cointelegraph.com/news/bitcoin-bears-at-risk-of-600m-liquidation-raising-chance-for-rally-to-70k?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
