Bitcoin’s liquidity fluctuations may set the stage for unprecedented price gains.

Bitcoin’s Sunday Rollercoaster Driven by CME Futures Sparks Anticipation for New Highs

Bitcoin (BTC) experienced a sharp surge late Sunday, pushing prices to about $107,000 before retreating sharply to around $102,000.

This typical weekend volatility often aligns with the opening of CME futures trading, where institutional investors start trading and adjust to the crypto market’s nonstop nature. However, this weekend’s price action had some unique characteristics.

Despite what appears to be a rejection at a key resistance level—one Bitcoin has struggled to overcome in three attempts—the initial price jump originated in the CME futures market, indicating institutional players led the move rather than retail traders.

In recent months, the CME futures market frequently opened below Friday’s closing price, causing chart “gaps.” This time, there was no gap; instead, Bitcoin’s price swung by roughly $5,000, draining liquidity on both the buy and sell sides and signaling a critical market turning point.

Currently, liquidity above $110,000 is thin, while there’s significant order support between $100,000 and that level. This imbalance suggests that a strong upward push could break through $110,000 and set a new all-time high.

On the flip side, this volatile move might have been a deliberate stop-loss hunt, designed to force short sellers to close their positions by pushing the price up temporarily.

Traders often use this tactic to open short positions at favorable prices. For instance, a trader aiming for a 4% risk might prefer to initiate a short at $107,000 with a wider stop-loss around $111,280 rather than a lower price with a tighter stop. By exploiting liquidity patterns, these traders can trigger short squeezes to secure better entry points.

With liquidity thin near Bitcoin’s record highs, the stage is set for a news event or catalyst to drive a breakout. Meanwhile, new short positions clustered near $107,000 may fuel the momentum for Bitcoin’s next big move upward.