Bitcoin just eliminated $600 million in wagers, initiating a “mechanical” cycle that drives prices toward $100k.

Bitcoin’s value surged past $95,000 in the last 24 hours, indicating a clear transformation in market dynamics rather than just a temporary spike in volatility.

As per data from CryptoSlate, the leading cryptocurrency increased by over 3%, reaching a peak of more than $96,000, marking its highest price point since mid-November. As of the time of writing, BTC has pulled back to $95,028.

Trading firm QCP Capital characterized this scenario as a “Goldilocks environment,” where the US job market remains strong, and inflation seems stable.

A note from the firm indicated that risk appetite is resurfacing across the board, buoying equities, precious metals, the dollar, and digital currencies simultaneously.

Bitcoin ETF flows and leverage flush

In the meantime, the increase in Bitcoin’s price was driven by a classic convergence of spot demand and leverage weakness, as US spot Bitcoin ETFs attracted about $753.8 million in a single session.

Data from Coinperps revealed net inflows of $753.8 million, with no outflows from any of the 12 spot Bitcoin ETFs that day. This indicates that the movement was indicative of widespread creations across the ecosystem rather than a quirk of a single product or a one-time rotation.

Additionally, the nature of these inflows provides clear evidence of institutional confidence.

The largest contributions came from Fidelity’s FBTC, which received $351.4 million in inflows, followed by Bitwise’s BITB with $159.4 million, BlackRock’s IBIT with $126.3 million, and Ark/21Shares’ ARKB with $84.9 million.

Compounding this buying pressure was a surge of forced purchases that eliminated around $600 million in bearish crypto positions. Notably, this marks the largest short liquidation event in the market since the decline on October 10.

Data from CoinGlass indicated that approximately $290 million in Bitcoin shorts were wiped out as part of the broader $600 million crypto liquidation event.

These liquidations act as mechanical buy orders that enter the market when traders exhaust their margin. This creates a feedback loop: ETF inflows tighten spot conditions, prices increase, shorts are squeezed, and liquidations trigger further buying.

Regulatory clarity and macro evolution

Beyond the immediate price movements, the crypto market is absorbing substantial structural news that aligns domestic legislative advancements with a broader macro-political tailwind.

Earlier this week, the US Senate released details about the Clarity Act, a framework for the market structure of crypto assets.

This legislation aims to distinctly classify crypto assets as either commodities or securities and specify which regulatory bodies govern each category.

Essentially, the framework permanently integrates Bitcoin, Ethereum, stablecoins, and spot ETFs into the US financial system. Observers in the market have suggested that this legislation could ignite a bull run for the sector.

Consequently, on-chain data reflects this shift toward institutionalization.

CryptoQuant’s Spot Average Order Size indicates that around the $90,000 level, retail involvement remains limited while mid- to large-sized orders are relatively prevalent. This suggests a period in which large investors are cautiously adjusting their positions while awaiting regulatory clarity.

Bitcoin Spot Average Order Size (Source: CryptoQuant)

Simultaneously, this legislative momentum aligns with a macro environment where the US is attempting to reestablish its dominance.

According to QCP, the market has shown resilience despite escalating geopolitical tensions and US engagements in Venezuela and Iran.

QCP Capital argues that the forthcoming midterm elections are a significant factor in this resilience. The firm noted that the Trump administration has incentives to maintain abundant liquidity and pursue equity market highs as indicators of political success.

In light of this, QCP contended that BTC’s ascent beyond $95,000 fundamentally alters the dynamics, as the leading cryptocurrency had previously lagged behind the recent uptick in equities and precious metals.

It added:

“With potentially further fiat currency debasement in the US, which has been driving precious metals higher, the relative affordability of Bitcoin compared to precious metals at this point may encourage a shift toward digital assets.”

What is next for Bitcoin?

In light of these developments, Bitcoin investors are currently considering three possible scenarios for the upcoming weeks:

• The first option is a “squeeze-and-fade” range trade, where BTC retraces part of its movement if ETF inflows revert to flat or negative.
• The second is a “flow-led grind,” where several positive days of inflows enable BTC to behave less like a squeeze chart and more like a spot accumulation market.
• Finally, the third scenario is a “reflexive breakout,” where another cluster of inflow days amounting to $500 million to $700 million triggers a self-sustaining rally in a supportive macro environment.

Allen Ding, Head of Bitfire Research, informed CryptoSlate that the market’s volatility metrics will be a critical indicator in the coming weeks.

According to him:

“After a period where Bitcoin’s 30-day implied volatility reached a yearly low of 40%, the decisive breakout past $96,000 for BTC and $3,300 for ETH confirms that a clear upward trajectory for the market is now established.”

He added that this momentum would be bolstered by a stabilizing macro environment and significant liquidity catalysts, including South Korea’s removal of crypto investment bans.

Ultimately, the market would perceive this recovery to $95,000 as a successful stress test of BTC’s capacity to rise back above six figures.

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