Bitcoin will hit the 72,000 USD milestone and will liquidate $2.5 billion worth of short positions.

Bitcoin hitting the $72,000 mark will liquidate $2.5 billion in short positions, potentially “crushing” the bear camp that’s using excessive leverage.

The war in Iran and high oil prices are currently putting pressure on BTC, but a ceasefire or ETF inflow could trigger a rapid rebound.

$2.5 billion in short positions faces risk if BTC hits $72,000

Bitcoin

BTC

$67,192

has been unable to reach new highs continuously since trying to reclaim the $75,000 level on 17/3.

The bearish bets in Bitcoin futures have increased as the war in Iran pushed oil prices to the highest levels since June 2022. However, two factors could push Bitcoin to $72,000 in the coming weeks and help reinforce a sustainable uptrend.

The combined estimated liquidation amount for BTC futures, USD. Source: Coinglass

According to Coinglass estimates, a total of $2.5 billion in short positions on Bitcoin futures would be liquidated if Bitcoin only needs to rise 7.5% to $72,000 from the current $67,100.

The BTC bear camp benefits from miners selling, while the S&P 500 weakens

Bears have increased short positions since 25/3, when Iran was reportedly refusing to negotiate a ceasefire. Additional selling pressure emerged when MARA Holdings (MARA US) said it sold 15,133 BTC on 26/3. This publicly listed Bitcoin mining company has shifted toward AI computing and chose to reduce its Bitcoin holdings to repay debt.

After reaching a near 7,000-point peak on 28/1, the S&P 500 fell 10% on 30/3. Investors are worried about recession risk because central banks have less room to cut interest rates due to inflation.

Oil prices have risen by more than 70% since the war in Iran began in late February, increasing logistics costs and cutting consumer spending.

Probability of the target interest rate for the September FOMC meeting. Source: CME FedWatch Tool

Traders are pricing in an 89% probability that the Fed will keep rates unchanged through September, with a 5% chance of a rise to 4%.

In early March, bond futures showed the opposite, with a 79% probability of cutting interest rates. The yields from fixed-income investments are likely to remain attractive for a longer period.

The annual funding rate of perpetual Bitcoin futures. Source: Laevitas

Meanwhile, bearish sentiment in Bitcoin has risen, as reflected by the negative funding rate in perpetual futures.

In neutral market conditions, longs typically pay fees to maintain their positions, causing this metric to fluctuate between 5% and 10% to cover the cost of capital.

A negative funding rate indicates a lack of demand for leveraged bullish bets and suggests the bear camp may be overly confident.

A ceasefire or economic weakness could drive Bitcoin

Although it’s impossible to predict the outcome of the war involving Iran, a ceasefire agreement could trigger bullish sentiment and catch bears off guard.

Bitcoin rose from $69,150 to $74,900 over the 5 days ending on 16/3 after the listed U.S. Bitcoin ETF funds recorded net inflows of $1.5 billion over two weeks. If ETF inflows return, Bitcoin could also reclaim the $72,000 level.

Related: Bitcoin ETF “will be bigger” than gold ETF – Analyst

Daily net flows of U.S.-listed Bitcoin ETFs, USD. Source: SoSoValue

President Donald Trump asked Congress to increase defense spending by $1.5 trillion, according to the 2027 budget proposal released Friday. The plan includes cutting 10% in other areas to offset military costs.

Trump is said to have spoken at a separate event at the White House on Wednesday: “We’re fighting wars. We can’t worry about daycare,” according to CNBC.

If the U.S. economy weakens, or if continued private credit withdrawals keep pressuring the market, investors may look to alternative hedging assets.

Therefore, Bitcoin’s appeal will increase as it is currently trading more than 47% below its all-time high. So, a move up to $72,000 could happen regardless of how long the war in Iran lasts.