Bitcoin Spikes to $78,000 in Short Squeeze While US Stocks Hit New Highs

Bitcoin (BTC) saw flash volatility around Tuesday’s Wall Street open as US-Iran nerves rocked risk assets.

Key points:

• Bitcoin briefly taps $78,000 as volatility returns to markets at the Wall Street open.
• US stocks hit new all-time highs, while crypto continues to underperform.
• Positive funding rates spark fresh warnings over Bitcoin’s immediate outlook.

Bitcoin neutralizes longs and shorts in volatile moves

Data from TradingView showed BTC/USD hitting $78,000 — its highest since Thursday — before abruptly heading lower.

BTC/USD one-hour chart. Source: Cointelegraph/TradingView

In doing so, the pair liquidated both short and long positions, with the 24-hour total at $66 million, per CoinGlass.

BTC liquidation history (screenshot). Source: CoinGlass

Macro events once again drove the market, with US strikes on Iran calling the latest peace deal attempt into question.

WTI crude oil headed toward $95 per barrel, while US stock markets again shook off the concerns, hitting new all-time highs and continuing a trend of strength seen last week.

CFDs on WTI crude oil one-hour chart. Source: Cointelegraph/TradingView

Commenting, trading resource Material Indicators said that BTC price action “remains driven by liquidation hunts.”

“Purple Whales are not suddenly flipping macro bullish for fundamental reasons – they are swing trading the range in low timeframes,” it explained in a post on X alongside a chart of Binance order-book liquidity. 

“The bid liquidity at ~$75.5k is attempting to protect key support at the 21 WMA.”

BTC/USDT order-book liquidity data. Source: Material Indicators/X

Material Indicators referenced Bitcoin’s 21-week simple moving average at $75,800, one of several nearby trend lines on the radar.

Continuing on the topic, trader Daan Crypto Trades noted that the “biggest” cluster of liquidity below price was at $74,000.

BTC liquidation heatmap. Source: CoinGlass

Funding rates see “sharp reversal” versus April

In a potential warning to bulls, onchain analytics platform Glassnode drew attention to rising funding rates on the day.

Related: Here’s what happened in crypto today

Previously negative, these were now “decisively positive,” it reported, as BTC long interest increased.

“The move marks a sharp reversal from April’s heavily short-biased positioning,” Glassnode told X followers.

Bitcoin futures funding rates. Source: Glassnode/X

Overall trading activity, however, remained comparatively modest, crypto analytics resource K33 Research noted.

“Bitcoin has spent the past week consolidating and trading broadly flat, while activity across crypto markets remains muted. Weekly spot volumes are approaching yearly lows, derivatives activity continues to decline across both CME and offshore venues, and open interest has largely stagnated,” head of research Vetle Lunde wrote in its latest Ahead of the Curve update. 

“At the same time, realized and implied volatility have drifted toward historically low levels, reinforcing a broader wait-and-see environment with subdued participation and limited market conviction.”

Bitcoin historical volatility (screenshot). Source: CoinGlass