Bitcoin has resumed its bullish momentum this week, gaining by over 5% in the last 3 days. The cryptocurrency had previously slowed down last week, leading to speculation that a BTC was due for a correction.
Bitcoin short sellers that saw an opportunity when Bitcoin bulls went on a brief recess last week are having a rough week.
This was because the price of BTC bulls made an unexpected comeback this week, pushing towards price discovery.
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According to CryptoQuant, total BTC shorts liquidations on exchanges in the last 24 hours amounted to $52.68 million.
Longs liquidated during the same session were notably lower at $30.99 million. The number of shorts liquidated every day for the last 3 days was higher than longs.
The ratio of shorts to longs liquidated confirmed that the sentiment around BTC was that it was overbought. Despite this, the bulls demonstrated that they were still raging on.
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The level of liquidations in actual sense were higher than that. This is because Bitcoin leveraged longs to be liquidated at $84,000 was over $1 billion. Bitcoin had rallied to $94,300 at the time of writing.
Bitcoin ETFs Inject Fresh Energy into Bulls
Is this a sucker’s rally before the pullback? BTC ETFs have been a key driver of market sentiment and at the forefront of the cryptocurency’s price action.
Unsurprisingly, the ETFs reportedly registered almost $1 billion in inflows during Tuesday’ trading session. The cryptocurrency had $816.4 million in net inflows going into ETFs.
Net positive Bitcoin ETF inflows were confirmation that the bulls were not ready to give up recent gains. Bitcoin demand will likely remain strong as long as ETFs continue to experience positive flows.
However, it is worth noting that a shift in guard in favor of outflows can potentially take place in the second half of the week. Such an outcome would likely pave the way for a substantial pullback and heavy long liquidations.
The ratio of longs vs shorts has been shifting in the last 3 days after the bears failed to materialize a sizable pullback. Longs grew from 48.56% on 17 November to 51.07% as of 20 November.
Binance had the highest amount of liquidity in the derivatives segment. It had $53.19 billion in long positions and $51.69 billion in short positions in the last 24 hours at the time of writing.
Strategic Reserve Narrative Gains Popularity
The Bitcoin strategic reserves (BSR) topic was trending in the last 24 hours. It has potential to be the next major BTC catalyst based on the impact that it will have in the cryptocurrency’s future.
The main reason why it trended was a recent Bitcoinist publication exploring how a BSC could impact fiscal policy.
Bitcoin as a strategic reserve asset would become more trusted as a store of value. The BSR is something that the incoming administration in the U.S will likely pursue.
The biggest reason for the excitement is that it proposes the purchase of at least 1 million BTC for the reserves.
Or roughly 5% of Bitcoin’s supply. This could lead to a massive surge in demand for the cryptocurrency.
Even more interesting is that such a move would likely pave the way for demand from mainstream institutions.
Other countries might also jump the trend. An outcome that could further boost Bitcoin demand in the future.
