#Gate广场五月交易分享 The crypto market is currently staging a classic short squeeze battle—after exactly four months, Bitcoin has returned above $80k, once breaking through the $81k mark. In the past 24 hours, the total liquidation amount across the network reached $268 million, with short liquidations totaling $213 million, nearly four times the long liquidations during the same period. Behind this bullish feast, Bitcoin futures holdings hit a record high, with leverage funds amounting to approximately $64.75 billion betting heavily on a single direction. Is this fueling the bull market or the gunpowder before a collapse? The market is providing the answer.

The biggest victims of this rally are undoubtedly the short-sellers. According to data from Drum Lion Finance Express, in the past 24 hours, the total liquidations across the network reached about $268 million, with longs liquidated at only $54.96 million, and shorts at $213 million, nearly four times the losses of longs. Specifically, Bitcoin short liquidations amounted to about $133 million, Ethereum short liquidations about $29.17 million. The total number of liquidated traders reached 93,159. Previously, Bitcoin repeatedly failed to break above $80k during rebounds, leading many shorts to open massive positions in this sideways range. When the market finally broke through $80k, the short squeeze strategy took effect—accumulated high short positions instantly became “fuel” for the bulls.

Meanwhile, Bitcoin’s total open interest across the network surged to a record high of about $64.75 billion. Such high open interest means that if the price continues to move in one direction, forced liquidations could trigger a chain reaction of liquidations.

Bitcoin’s return above $80k is driven by a “handshake game” between institutions and miners.

Institutional side: ETF inflows are expanding comprehensively. On May 4, the US Bitcoin spot ETF recorded a net inflow of $532 million, maintaining net inflows for the third consecutive trading day. BlackRock’s IBIT led with $335 million in inflows, followed by Fidelity’s FBTC with $184 million, and Morgan Stanley’s MSBT with $12.2 million. Last Friday (May 1), the single-day inflow reached as high as $630 million, with BlackRock alone accounting for $284.4 million. Regarding Ethereum ETFs, on May 4, net inflows reached $61.3 million, maintaining positive flows for several days, with BlackRock’s ETHA leading with $54.8 million.

Miner side: Operating pressures persist, with a record sale of 32k BTC in Q1. In stark contrast to institutional buying, North American listed miners sold over 32,000 BTC in Q1 2024, setting a quarterly record. Since the new halving in 2024, the unit hash rate (Hashprice) yield has fallen to as low as $30 per PH, forcing some high-cost miners to continue shutting down. Bitcoin mining difficulty was adjusted downward by 2.3% on May 2, indicating that miners constrained by profitability pressures are still passively exiting.

In this rally, subtle changes in US-Iran geopolitical tensions have acted as “market catalysts.”

On May 4, the US began a clearance operation in the Strait of Hormuz, guiding stranded ships to leave the strait. Trump then announced a pause on “freedom of navigation” operations, widely seen as a continuation of the first phase of a US-Iran ceasefire. Wall Street analysts pointed out that the easing of congestion in the Strait of Hormuz has partially unwound the risk premium associated with “interruption of passage” in the oil market.

However, rational analysis indicates that the current ceasefire arrangement remains fragile, with the real red line still ahead—if navigation issues and nuclear negotiations become more entangled again, geopolitical risks could resurface. On May 5, crude oil prices dropped sharply by about 2%-4%, directly boosting risk appetite in the crypto market. But experts warn that “the war premium unwinding caused by loosening the Hormuz passage mechanism” has already been priced in phases, and future volatility could be triggered by key issues.

Key levels and future outlook

Bitcoin key levels

Currently, Bitcoin is oscillating near $81,000, entering a typical high-leverage standoff. From a technical perspective, if Bitcoin can hold above $80,500–$81,000, it may further test $85,000–$86,000, and even challenge $90,000. According to CoinGecko data, if BTC strongly breaks through the $89k mark, the total liquidation of open shorts could reach about $663 million. Conversely, if it drops below the $78,000–$79,000 range again, the market may retreat to the $75,000 support level for a second confirmation. From an on-chain perspective, the “true market average” price level is currently around $78,000, which is an important cost benchmark for Bitcoin spot liquidity. If Bitcoin can sustain above $80k, further multiplier effects could be triggered, allowing bulls to dominate.

Ethereum key levels

ETH is currently trading above $2,300, following Bitcoin’s overall trend. Major resistance is in the $2,450–$2,500 range. If it can break through this zone and Ethereum ETF capital flows continue to improve, ETH/BTC could further rebound, challenging $2,650. Conversely, if it pulls back, $2,200 remains the main defense zone.

Trading suggestions

Short-term: Bitcoin’s current futures open interest has surged to a historic high, with high leverage stacking creating an extreme scenario of “long and short chain explosions.” If your positions are profitable, consider gradually closing to take profits, waiting for a pullback to the $78,000–$79,000 level for confirmation signals. Entering on the right side can wait until the price effectively stabilizes above $82,000, confirming a bullish structure before lightly entering. For Ethereum, focus on the breakout of the $2,450–$2,500 zone; long positions should wait until ETH clearly outperforms Bitcoin before acting. If already profitable, consider gradually closing to take profits, waiting for a pullback to $78,000–$79,000. Enter on the right side after the price stabilizes above $82,000, confirming a bullish structure. Keep an eye on the breakout of $2,450–$2,500 for ETH, and only go long when ETH shows clear strength over Bitcoin.

Mid- to long-term: Bitcoin’s return above $80k marks the end of the deleverage process since the end of last year. This suggests that the bottom has likely been lifted. You can wait for the price to retrace to the $77,000–$78,000 zone to strategically build positions.

The current bull market structure is still driven by spot holdings, with large ETF capital inflows and technical indicators providing bottom support. For long-term investors optimistic about the future of digital assets, gradually accumulating on better information windows remains the most rational strategy.

Key risks

Excessive leverage: The entire market’s futures holdings exceed $64 billion, setting a record. Massive open interest means the market could sharply reverse at any time due to liquidations.
Geopolitical uncertainties: The blockade of the Strait of Hormuz has not yet been confirmed by Iran. The current “ceasefire benefits” remain fragile. If key disagreements over nuclear issues escalate, market premiums could suddenly reverse.
ETF funds are not omnipotent: While ETF inflows provide liquidity support at the $80,000 level, their influence on the overall market is limited. If the macro environment in US stocks further deteriorates, ETF capital flows could be systematically withdrawn at any time.

Wishing everyone successful trading 😊