🎧 Morning Brief #162- audio debate on today’s market setup
Bitcoin enters May with a stable Neutral Mode on Trend Pulse and a persistent short overhang. Since February 5, the market has gone through several waves of forced liquidations of bearish positions totaling $7.8B, systematically squeezing sellers on every upside impulse. Yesterday's spike to $175M against a quiet week reveals the key dynamic: shorts are being reopened near $80K - and paying for that bet again.
TL;DR
This brief covers three waves of short liquidations from February through May, including a single-day peak of $737M, and the current Neutral Mode on Trend Pulse. The market is systematically squeezing bears, but a full Bull Mode still requires confirmation from the long-term trend.
Bitcoin Short Liquidations USD
The metric reflects the daily volume of force-closed short positions in USD across all exchanges.
Since early February, short liquidations have moved through three distinct waves. The first and most severe ran from February 5-13: on February 13 alone, the market force-closed $737M in shorts - the absolute peak of the entire period. That was preceded by $321M on February 11 and $234M on February 6. The second wave formed in late February through early March: $440M on February 25, $385M on March 4, and $203M on February 28. The third wave ran through March and April: $532M on March 23, $526M on April 17, and $608M on April 22 - the largest spike of the second half of the period.
After that, liquidations collapsed sharply to background levels in the $2-28M per day range. Then on May 4, volume suddenly jumped to $175M. That is an important signal: even after a series of squeezes, shorts keep reopening positions near $80K.
The three-wave pattern says one thing: bears keep fading the market after every squeeze, and every time they get force-closed again. Yesterday's spike is especially telling precisely because it happened during a quiet week. It means short interest continues to accumulate in the $80K zone. If price holds this level and pushes higher, the next liquidation wave could become self-reinforcing - the accumulated short overhang is already turning into potential fuel for an accelerated move up.
Bitcoin Trend Pulse - Neutral Mode
The indicator combines two signals: the 14-day return as short-term momentum and the SMA30/SMA200 ratio as the long-term trend gauge. Bull Mode activates only when both conditions are met simultaneously.
On April 7-8, the market exited Bear Mode and transitioned into Neutral Mode. Since April 9, this regime has held continuously for nearly four weeks, with the current price at $80,257. The short-term signal is already positive: the 14-day return remains above zero, and price has recovered from the $68-69K range seen in early April. But the long-term trend remains unconfirmed - SMA30 has not yet crossed above SMA200, and that is precisely what is keeping the model from flipping into Bull Mode.
Neutral Mode is a transition zone. The market has exited the bearish phase but has not yet proven a full reversal to the upside. The main risk is a pullback below $74-75K, which would reset the short-term return to zero and push the model back into Bear Mode.
The link between the two metrics: each of the three major liquidation waves - $737M, $532M, and $608M - occurred at moments when Trend Pulse was in Neutral Mode or just trying to exit Bear Mode. In other words, the market keeps standing at a crossroads while shorts keep betting against price holding.
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FAQ
Why has Neutral Mode persisted for nearly a month without flipping to Bull Mode? Because Bull Mode requires two conditions to be met simultaneously: a positive 14-day return and SMA30 crossing above SMA200. The first condition is already met. The second is not yet, as SMA200 is still being pulled down by the weak price data from early in the year. For the flip to Bull Mode, the market needs either several more weeks of holding current levels or a stronger upside impulse.
What specifically would push the model into a new regime? A flip to Bull Mode is possible if price holds sustainably above $80-82K for a few more weeks - that would allow SMA30 to catch up and cross above SMA200. A return to Bear Mode, conversely, would be triggered by a drop below $74-75K.
CONCLUSIONS
Wave after wave, the market is clearing the short overhang - $737M in February, $532M in March, and $608M in April. Against this backdrop, Trend Pulse has held Neutral Mode for nearly a month without returning to the bearish zone. The current picture remains neutral with a bullish tilt: short-term momentum is already working in favor of upside, but the long-term trend has not yet given its final confirmation.
The key trigger for the weeks ahead is SMA30 crossing above SMA200. That is what activates Bull Mode and will likely coincide with another wave of forced short closures. The main risk is losing the $74-75K zone, which would break the current structure and reopen the space for bears.
Further Reading
- Bitcoin Liquidation Cascade: How It Works, Why It Happens & How to Predict It - the mechanics behind the three liquidation waves covered in today's brief
- Bitcoin Open Interest & Leverage Ratio - how to read the short overhang building near $80K
- Bitcoin Open Interest and Funding Rate: The Combined Framework for Reading Derivatives Markets - the full derivatives context for interpreting liquidation spikes