BTC Short Liquidation, New Uptrend Cycle Initiated

Short Squeeze Triggers Trend Reversal

Bitcoin breaking above $71,000 is not random volatility but a shift from sideways consolidation to an upward trend. The logic is simple: According to Coinglass data, about $189 million worth of BTC short positions were liquidated in 24 hours, with shorts making up roughly 80%. These forced liquidations turned into spot buying, pushing the price from $70,442 to $71,133.

On-chain and derivatives data confirm each other: NUPL is at 0.233, in the “hope” zone—profits are accumulating but not yet at crazy levels; NVT is at 29.1, indicating undervaluation, with network activity not fully catching up to the price, which usually suggests room for further upside. Funding rates average around 0.20% (neutral), with no signs of excessive leverage from long squeezes. Open interest has expanded to $96 billion, more likely indicating new capital entering rather than old players repeatedly levering up.

I choose to ignore popular altcoin narratives—whether it’s Bittensor’s AI subnet revenue or PEPE’s wedge pattern. These stories emerged after BTC broke out and are not the reasons for the rally. Altcoin market share remains suppressed. The market is chasing altcoin hype but overlooking that BTC is absorbing liquidity. Trading strategy: go long on BTC via spot or conservative perpetual contracts; avoid altcoins until BTC market share truly starts rising.

From a broader perspective, risk appetite is recovering. BTC, as an anchor asset, is leading related assets (like ETH, with similarly neutral funding rates) into risk-on mode. Due to API issues, the data on long-short ratios is incomplete, but the liquidation structure dominated by shorts indicates the bears are on the wrong side, increasing the likelihood of continued upward movement.

• Momentum: 1-hour price hugging the upper Bollinger Band ($71,523), firmly above the 20-period EMA ($70,488), indicating buyers are in control.
• Cycle position: MVRV at 1.304, in the “reasonable high” zone—major market tops usually exceed 3, so there’s still room.
• Volatility: Near $71,000, 15-minute swings of over 1% are possible, but with open interest rising, the trend is likely to continue.

This breakout has been brewing within a few weeks of sideways trading, with $70,500 support remaining intact despite macro headwinds like a strong dollar. Currently, native crypto capital is leading the pace. Multi-timeframe technicals—daily RSI neutral at 52, hourly RSI rising to 61, 4-hour MACD histogram turning positive—resonate with undervalued on-chain signals, indicating accumulation is shifting toward expansion. Buyers are in control, but no signs of distribution typical of a top.

The Market Is Focusing on the Wrong Things

Below is a table of mainstream narratives, evidence, transmission mechanisms, and my views:

The “evidence” for altcoin bullishness looks lively but is unlikely to truly drive prices. Currently, BTC’s rise is self-driven from derivatives. Strategy: avoid shorting against the trend; in the current bullish structure, treat pullbacks as buying opportunities.

Core conclusion: We have shifted into an uptrend, with bulls in control.

Assessment: You are in the early stage of this rally. Long traders and gradually increasing funds/long-term holders have the advantage; builders are less impacted; altcoin traders should wait until BTC market share begins to rise before acting.