Bitcoin Nears $80,000 After Historic Downside Liquidation: Has the Bull Market Started?

In my previous analysis, I was quite clear: Bitcoin was not yet bullish unless it could recover and decisively break through the $67,000 zone.

At that point, while many were still expecting further decline, my view was that Bitcoin was going through an accumulation phase, very close to what could ultimately become the bottom of this correction. This is why I considered purchases below $65,000 to represent an interesting accumulation opportunity for investors looking beyond the short-term movement.

I also pointed out something important: after so many weeks of compression, once Bitcoin manages to break out of this structure, the movement would likely be violent.

And that’s exactly what we saw.

Bitcoin broke through $67,000, quickly accelerated past $70,000, and eventually reached around $79,000–80,000, marking one of the most aggressive upward moves in recent months.

A historic liquidation of short positions

But behind this rally, there is a particularly important factor: the huge short squeeze that took place in the market.

During the breakup, billions of dollars of bearish positions were liquidated. About $3 billion in short positions were wiped out in the initial move out of the zone, making it one of the largest downside liquidation events seen in years. As the rally continued, cumulative estimates exceeded $4 billion.

This is important because it partly explains the speed and violence of the movement.

As Bitcoin began to break through resistance levels, short traders were forced to close their positions. These closes generate forced buying, which pushes the price even higher and triggers further liquidations.

This is the classic domino effect of a short squeeze.

After several weeks of trading in a relatively narrow range around $60,000–65,000, there was a significant amount of fuel waiting for a breakout.

Reaching $80,000 Doesn’t Mean Everything Has Changed

This is where I believe we need to separate emotion from market structure.

After such a vertical move, it is very easy for the market to go from extreme fear to FOMO in a matter of days. But the fact that Bitcoin has gone from the $60,000–65,000 zone to almost $80,000 does not automatically mean that the broader bearish structure is over.

Looking at the daily chart, Bitcoin managed to break the descending trendline that had been respected for much of 2026.

This is the first positive signal.

However, we are now approaching an area that I believe is much more important: $82,000–84,000.

This area represents relevant horizontal resistance and a region where selling pressure had previously appeared.

For this reason, I believe that Bitcoin needs to recover and consolidate above around $82,000 before we can start talking about much more compelling structural change.

Until then, the current move can still be interpreted as a very strong rally within a larger structure that still requires confirmation.

Now the market has to prove it

My scenario has changed from when Bitcoin was trading below $65,000.

At that point, we had accumulation, negative sentiment, and a compressed structure with the potential to generate strong expansion if Bitcoin reclaimed $67,000.

This movement has now happened.

I wouldn’t buy just because Bitcoin went up about 20% and everyone suddenly became optimistic again.

Now I want confirmation.

There $80,000–$84,000 area is, in my opinion, the real test.

A clear breakout, supported by volume and followed by defense of this area as support would significantly strengthen the argument that the bottom is already behind us and could open the door to a new bull market phase.

If Bitcoin is rejected from this zone, we could see a short-term correction. The depth and structure of this correction will then need to be analyzed as it develops.

A strong rejection would also force us to consider that this move was primarily a huge short squeeze before the market continued within a corrective structure.

Bitcoin has already accomplished the first part of what we expected: he left the accumulation zone, and did so violently.