- Bitcoin’s local bottom may be forming as DXY weakness mirrors late 2022, when BTC began a strong uptrend.
- A $9.3B short liquidation cluster between $83K and $99K could trigger a sharp BTC rally toward $100K.
- Bitcoin’s price momentum gains strength as short liquidations rise, fueling buying pressure and reducing risk for bullish positions.
Bitcoin’s price action is aligning with historical trends, suggesting a potential local bottom. A bearish weekly candle on the U.S. Dollar Index (DXY) mirrors a similar pattern from late 2022 as per Washigorira. Back then, Bitcoin hit a cycle bottom as the dollar weakened. Now, the same scenario appears to be unfolding in early 2025.
Bitcoin and DXY’s Inverse Correlation
Bitcoin’s price movements have historically reacted inversely to the dollar index. In late 2022, DXY formed a large bearish candle, signaling a sharp decline. During the same period, Bitcoin established a bottom and began an upward trend. A similar pattern is currently visible in early 2025, as DXY’s strong bearish movement could set the stage for Bitcoin’s recovery.
This correlation highlights key market shifts where a weakening dollar boosts Bitcoin’s momentum. Historically, Bitcoin benefits when DXY faces downward pressure, reinforcing the probability of a local bottom forming.
Massive Short Liquidation Ahead at $100K
Bitcoin’s recent uptrend has put pressure on short sellers, with liquidation risks increasing as the price rises, as per analyst Wise Advice. The Bitcoin Exchange Liquidation Map shows a potential $9.3 billion worth of shorts at risk of liquidation if Bitcoin reaches $100,000. The data, gathered from Binance, OKX, and Bybit, highlights a significant liquidation cluster between $83,000 and $99,000.
At the current price of $86,417, cumulative short liquidations exceed $10 billion. As Bitcoin climbs, leveraged traders are forced to close their short positions, fueling additional buying pressure. Major exchanges contribute differently to the liquidation volume, but the trend remains the same—higher prices intensify short liquidations.
The confluence of DXY weakness and Bitcoin’s liquidation pressures presents a compelling market setup. If Bitcoin follows historical trends, its price could see a strong bullish push as shorts get squeezed. Additionally, decreasing long liquidations indicate reduced risk for bullish positions, further supporting an uptrend.
