The following are just my personal thoughts and do not constitute any trading advice.

Bitcoin recovers the 70k level: Is it a false move of a "short squeeze" or a sign of a bottom being formed?

Hello everyone, today I want to discuss some of the hardcore logic behind the market movements. Driven by news sentiment, Bitcoin on April 8th forcefully regained the key psychological level of 70,000.

Many people are shouting "bulls will return quickly," but if you carefully peel back the surface of this rally, you'll find that what's flowing through its bones isn't the "hot blood" of increasing volume, but the "pus and blood" of short sellers being squeezed out. The logic behind this rise is quite special: at a time when most are watching cautiously and the market is extremely quiet, short sellers were precisely trapped and forced to buy back in the "vacuum zone" with no trading volume.

Let's break down the true nature of this market move:

1. The fuel for the rise: Not chasing the rally, but a "stampede"

The push to 72k was essentially short sellers being forced to buy back to cover their positions.

Severe imbalance in liquidations: Looking at the data, within 24 hours, short positions were liquidated many times more than long positions. What does this indicate? It shows that many traders were heavily bearish between 68k and 70,000. When unfavorable news for the bears came out, the market was so thin that short sellers, trying to escape, had to buy aggressively to close their positions regardless of the price. This "self-inflicted" buying by traders on both sides contributed the majority of this rally.

Market makers' role: Because the price was stuck in a sensitive zone, market makers behind the scenes had to buy spot to hedge risk. This was like pouring gasoline on an already raging fire, making the price surge even more steeply.

2. The chip structure: Between 70,000 and 84k is actually a "no man's land"

Looking at Bitcoin’s trading distribution, a rather awkward reality emerges:

Trading gaps: In the range of 72,000 to 84k, historically, there has been very little trading activity. It’s like a cable car between two mountains with no stops in between—once you slide past, the speed is fast, but there’s nowhere to land.

The "sigh wall" at 84,000: Why is 84,000 a tough nut? Because it was the starting point of a previous big move and the "disaster zone" of the last bull market, with many trapped above. Without a significant volume of turnover, trying to break through is likely to be met with dense sell orders that push the price back.

Low volume, low price? Currently, the number of active retail addresses has hit a multi-year low. While this indicates a lack of enthusiasm, from another perspective, those who wanted to sell have already sold out, and the remaining chips are locked away by big players. As long as there’s a spark, the price can be easily pushed up.

3. Don’t get caught up: Hidden risks and key levels

Although the current rally looks fierce, there are two hidden dangers to be aware of:

Risks of a volume-less rally: The current price increase is driven by short covering "blowing up" the price, not genuine buying. With volume lagging behind, most traders are just watching. If some unexpected event occurs in the next few days, this kind of rally without sufficient turnover can reverse just as quickly, potentially forming a huge bearish candle.

The current situation can be understood as a "breathing period after liquidation."

Therefore, in the short term, due to the inertia of the short squeeze, the price might still have some upward momentum. But on a larger cycle, Bitcoin is still in the bottom consolidation phase after last year's major correction. Before that mountain is crossed with high volume, don’t rush to call for a bull return.