Bitcoin tops $66,000 as short squeeze drives one-month high

Bitcoin rose 3.3% to $66,306 on July 21, reaching a one-month high as short sellers were forced to unwind positions.

The move was driven primarily by short covering rather than fresh long accumulation, with open interest declining as prices rose, according to Coinglass data.

Cross-crypto liquidations reached approximately $200 million over 24 hours, with short positions accounting for the majority of forced closures. Bitcoin futures open interest fell alongside the price increase, a pattern consistent with a squeeze rather than organic demand.

Traders now eye $67,500 to $68,000 as the next resistance zone. A daily close above $68,000 could open a path to $70,000, representing a potential 5% to 6% gain from current levels, according to independent trader Ted Pillows.

Bitcoin's breakout comes as macro conditions remain mixed. The US-Iran conflict pushed WTI crude above $80 per barrel and Brent above $90, while the Federal Reserve is widely expected to hold rates at 3.50% to 3.75% at its July 29 meeting, CME Group's FedWatch Tool shows, with 83.4% probability.

Options market data from QCP Capital shows dealers are short gamma into the July 29 Federal Open Market Committee meeting, increasing the potential for an accelerated move higher should geopolitical tensions around the Strait of Hormuz ease.

Trader Jelle noted that the $65,000 to $67,000 zone represents resistance from the first-quarter range, but given how quickly price sliced through it on the way down, it may not offer significant resistance on the way back up. His target sits at $70,000 range highs.

However, commentator Exitpump warned that Bitcoin's perpetual swap cumulative volume delta shows a bearish divergence, suggesting the rally lacks genuine buying interest. "There's very little real buying interest here," he said on X, pointing to declining open interest as evidence that the move was mostly short covering.

Bitcoin's 24-hour trading volume rose above its seven-day average as the breakout gained momentum, though spot market activity remains below the $4.5 billion threshold that Glassnode identifies as a sign of healthy participation.

This article is for informational purposes only and does not constitute investment advice.