- BTC and ETH are riding a bullish wave, sparking a cascade of forced deleveraging.
- Don’t count on smooth sailing just yet.
Bitcoin [BTC] and Ethereum [ETH] steam rolled bearish bets, igniting nearly $1 billion in liquidations on the 8th of May, with a brutal 80% coming from short positions. It’s a textbook short squeeze, and the wreckage isn’t pretty.
But here’s the twist: It might not be game over for the bears.
RSI on both majors was screaming overheated – we’re talking deep into overbought territory. Historically, that’s where momentum stalls and tactical shorts start circling.
In fact, fresh Coinglass data showed 139,241 traders got blown out in 24 hours, with total liquidations at $328 million.
And despite bullish momentum, it was the longs who took the bigger gut punch, coughing up $170 million. That kind of whipsaw? Classic late-stage volatility.
So what’s next?
The spread is razor-thin, and technicals are flashing red
We’re entering a high-stakes chop zone. With BTC and ETH perched above key resistance-turned-support levels, the market’s at an inflection point.
Momentum indicators are flashing caution: At press time, RSI was overheated, and On-Balance Volume (OBV) started to stall – classic signs of a retail-driven rally running on fumes.
At the same time, Open Interest (OI) climbed 1.25% to $137.44 billion, signaling leveraged exposure is back in play.
Source: Coinglass
That’s not inherently bullish. In fact, with thinning bid walls, this spike in OI could be laying the groundwork for a liquidation cascade if support falters.
ETH has already seen a $61.25 million long closure in the past 24 hours, while BTC wiped out over $600k in longs in the 4-hour timeframe.
The $170 million long squeeze might have just been the opening act, and if the market stumbles, things could get messy fast.
BTC and ETH: Steering the ship or sinking it?
As BTC and ETH hover near local highs, the next move hinges on how smart money deploys.
Whale activity at these levels typically signals one of two scenarios: A distribution trap or a controlled consolidation above supply.
Either way, the order books are about to get tested, and it’s the whales who’ll decide whether this is re-accumulation or exit liquidity.
Why? Momentum indicators are flashing exhaustion, and opportunistic shorts are stepping in.
Lookonchain data just spotted a whale moving $13 million USDC to Hyperliquid, shorting both BTC and ETH – a tactical bet on a near-term reversal.
Unless smart money steps in to force continuation and trap bears once again, the thin bid-side and exhausted upside momentum could flip the script.
If the bulls fumble here, we may be looking at the beginning of a cascading unwind. Hence, payback for the $1 billion in short liquidations swept earlier this week.