Bitcoin Rockets Past $110K While Traders Ramp Up Aggressive Short Bets

Bitcoin smashed through the $110,000 mark on Thursday, setting a new all-time high and triggering about $500 million in derivatives liquidations. Yet, a surprising number of traders remain cautious, taking aggressive short positions despite the rally.

Trading volume surged by 74% over the last 24 hours as market participants raced to adjust their positions. However, data from Coinalyze shows the long-to-short ratio has dropped to its lowest since September 2022—during the depths of the crypto winter—indicating a significant lean toward bearish bets.

This shift began on April 21, when traders started heavily shorting Bitcoin’s breakout above $85,000, anticipating that level as the cycle peak and predicting a double top formation. Nevertheless, Bitcoin defied these expectations, steadily climbing and breaking past key resistance points at $97,000 and $105,000.

Multiple factors have propelled the rally, including a recovery in U.S. equities after easing tariff concerns, rising institutional participation on exchanges such as CME, and a hefty load of short positions ripe for a squeeze, which further accelerated the price upwards.

Ironically, these short positions are acting as fuel for the rally by providing targets for stop-loss hunting and forcing short sellers to cover, boosting buying pressure as witnessed earlier this week.

Entering short positions near record highs is a common tactic—traders often short at resistance zones, placing stop losses slightly above to limit risk. For instance, those who shorted near $105,000 during Bitcoin’s repeated tests of that level could have profited from subsequent pullbacks to around $102,000, and even if stopped out at $109,000, may still have ended the week profitable.

Open interest in BTC derivatives also tells an intriguing story. While BTC’s price increased by 4.8% in 24 hours, open interest jumped 17%, even after millions in liquidations. This suggests that leveraged bets are driving much of the current momentum, raising questions about the breakout’s durability compared to the earlier moves above $100,000 in late 2024 and early 2025.

Whether traders will keep adding to short positions as Bitcoin pushes above $111,000 remains uncertain, but the mountain of shorts on the books could provide ample fuel for future short squeezes if the rally persists.