Bitcoin’s $6 Billion Positions at Risk Ahead of Fed Rate Decision, Short Squeeze Possible
The post Bitcoin’s $6 Billion Positions at Risk Ahead of Fed Rate Decision, Short Squeeze Possible appeared on BitcoinEthereumNews.com.
Bitcoin is trading in a narrow range around $93,800 ahead of the Federal Reserve’s interest rate decision, placing over $6 billion in leveraged positions at risk of liquidation from even minor price shifts, according to derivatives data from CoinGlass. Nearly $3 billion in short positions could be liquidated if Bitcoin rises just 3% to $96,250, triggering widespread forced buying. Conversely, $3.52 billion in long positions face elimination with a 4.54% drop to $89,209, highlighting the market’s delicate balance. Market open interest has declined since late November, with data from Velo indicating short-covering activity amid weak spot buying, per recent analytics. Explore Bitcoin’s price volatility ahead of the Fed rate decision and the $6B liquidation risks. Stay informed on crypto market dynamics for smarter trading strategies—read now for key insights. What Risks Does the Fed Rate Decision Pose to Bitcoin Traders? Bitcoin Fed rate decision risks are mounting as the cryptocurrency hovers in a tight trading band, exposing billions in leveraged bets to potential wipeouts. With the Federal Reserve’s announcement approaching, even small price fluctuations could liquidate substantial positions, amplifying market volatility. Data from CoinGlass reveals that shorts and longs alike are vulnerable, underscoring the high-stakes environment for investors. How Could a Short Squeeze Impact Bitcoin’s Price Momentum? A short squeeze in the Bitcoin Fed rate decision scenario could propel prices sharply upward if the Fed signals a dovish stance, such as a quarter-point rate cut, which bond traders are pricing at nearly 90% probability. This event would force short sellers to buy back Bitcoin to cover losses, accelerating an uptrend toward the $100,000 psychological barrier. According to Velo data, declining open interest since November 21, coupled with rising cumulative volume delta in perpetual contracts, points to ongoing short-covering rather than fresh bullish bets. Spot buying remains subdued, with orderbook depths…
