Bitcoin Price Action: Liquidation Levels and Potential Volatility

Bitcoin is currently trading near $105,000, with its price action closely monitored by traders. The 26 EMA has emerged as a crucial support zone on the daily chart after a significant rally from recent lows. However, declining trading volume suggests market hesitancy.

Binance BTC/USDT liquidation heatmaps reveal two key liquidity clusters: one just above $110,000 and another near $104,000. These clusters act as traps for high-leverage traders, where price movements could trigger cascading liquidations and rapid price swings.

If Bitcoin breaks above $110,000, it could trigger a short squeeze, forcing liquidations of short positions and potentially driving a swift rally. Conversely, if the price drops below $104,000, it may lead to a sharp decline toward $100,000 or lower.

The market's appetite for leverage remains strong, with Bitcoin hovering between $105,000 and $106,000. Bulls regaining control could push the price toward $110,000, while continued bearish pressure may result in a steep drop below $100,000.

The heatmaps indicate heightened volatility ahead, regardless of the direction Bitcoin takes. Traders should remain vigilant as these liquidation levels could amplify price movements in either direction.