Bitcoin climbs as $174M in shorts get wiped out, Binance traders hit hardest

BTC rose above $116,000, causing another wave of short liquidations. The leading coin extended the late Sunday rally, breaking the expectations for another downturn. 

BTC recovered above $116,000 briefly, extending the wave of short liquidations. The leading coin rallied to $116,032, before sinking again to the $115,800 range. 

On Monday, BTC extended the gains from the weekend, mostly based on attempts to liquidate the available short positions. The move above $116,000 caused another wave of $19.15M in new liquidations. 

BTC extended its dominance to 57.7%, though currently the market is not categorically in BTC season. With the recent recovery, BTC achieved a slim net gain of 1.21% in October. The leading coin has been unusually volatile in the past month, causing a market-wide capitulation.

Historically, BTC is in the green in October, but the recent dips may make the month one of the worst-performing for the past few years. BTC is still facing the monthly options expiry and a new week of potentially volatile trading before showing the final October results.

BTC short interest increased ahead of rally

The recent rally arrived after BTC increased its open interest from lows of $33B to over $36B. Around 40% of the open interest is in short positions, potentially triggering liquidations similar to Monday’s event. On Hyperliquid, whales have the same ratio of long to short positions. Notorious trader James Wynn also opened a relatively small short position from his main known account, with a liquidation price of $117,470.

The available short liquidity expanded the price move, with Binance this time leading as the venue of the biggest short liquidations. BTC now has much thinner liquidity up to $120,000, and a short squeeze is not a probable driver of another climb to all-time highs. 

Previously, BTC briefly had short positions up to $130,000, but those were closed ahead of a smaller short squeeze. The BTC volatility index continued climbing to a six-month high of 1.97%, showing a short position remains risky. 

After the price swept the short positions, BTC sets expectations for going to a lower range. Most of the newly build long positions are at $112,500, with more liquidity stacked at $113,000. Selling may trigger a new wave of long liquidations and a dip to a lower range. 

Will the BTC recovery last? 

The recent trading cycle set up new questions on whether the BTC rally can continue. For some, the current trading cycle is over. Other predictions include a year-end rally to new peaks. 

BTC is still aggressively traded on derivative markets, with high-value speculative bets. On Hyperliquid, some of the most significant whales are longing BTC, remaining in profit after the recent recovery. 

Other predictions include ongoing cycles of range-bound trading, without a deep 70% correction as during previous halving periods.

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