More than $4 billion in long positions are sitting on the edge of liquidation at $77,000, a level that hasn't been tested since late April. That figure comes as close to $8 billion in short positions have already been forcibly closed since early February, in what traders describe as a grinding squeeze that played out in three distinct waves. The largest single-day short liquidation spike hit $737 million on February 13, data shows, and the pace finally eased — daily liquidation volumes dropped to a range of $2 to $28 million before spiking again to $175 million on May 4.
Three waves of pain for bears
The short squeeze wasn't a single blast. It came in waves from February through April, each one pushing shorts out at higher prices. By early April, Bitcoin had moved out of bear mode and into neutral territory, according to Axel Adler Jr.'s trend pulse model. A full bullish signal still requires the 30-day simple moving average to cross above the 200-day simple moving average — a crossover that hasn't happened yet, but one that traders are watching closely.
Open interest climbs, funding stays negative
Bitcoin's open interest across all exchanges rose 6% to nearly $30 billion as of early May, its highest since January 31. That suggests money is coming back into the market, but not all of it is bullish. Funding rates remain near -0.0045, indicating short-side pressure is still active while long positions are not yet crowded. In other words, bears are still paying to keep their bets open — a dynamic that has historically preceded further squeezes when price starts moving up.
Net exchange outflows of 837 BTC occurred on May 5, following a larger outflow of 6,590 BTC the previous Monday. Those flows suggest coins are moving off exchanges, often interpreted as a signal that holders aren't planning to sell soon.
Key levels: the floor and the ceiling
Bitcoin broke above a descending trendline that had capped price gains throughout April. The 100-day exponential moving average sits just below the current price, acting as a dynamic floor. The short-term holder cost basis aligns near $81,500, keeping recent buyers in profit. Above that, the $86,000 to $90,000 range represents a supply zone of prior selling activity — the next major test for any rally. If buyers can push through that zone, the path to higher levels opens up. If not, the liquidation cascade at $77,000 remains a real risk.
