Bitcoin (BTC) continues to trade below $75,000, less than 48 hours after a crypto wipeout triggered over $1 billion in liquidations and pushed the asset close to $70,000, according to AMBCrypto. The event sent market sentiment into extreme fear, but traditional risk assets have shown resilience: the S&P 500 has risen by over 2% during the same period.
Bitcoin lags traditional markets
The growing disparity raises questions about Bitcoin's performance as a macro hedge this cycle. Long-time Bitcoin critic Peter Schiff warned of a deeper correction, citing BTC's underperformance compared to other risk assets. Precious metals such as gold and silver have also gained over 2%, widening the performance gap.
Against this backdrop, positioning for further downside is gaining traction. According to CoinGlass data, Bitcoin's long/short ratio fell from a three-month high of 1.4 on November 7, indicating traders are returning to short positions and signaling weaker confidence in a near-term recovery.
Liquidation clears long-side liquidity
The recent $1 billion liquidation event has wiped out almost all long-side liquidity, leaving no downside liquidity left to be hunted. This could present an opportunity for bulls to recover. If Bitcoin remains above $75,000 and accumulation continues, both early and late short positions could come under pressure. One analyst highlighted over $11 billion in short liquidity clustered around $87,000.
Sentiment shows early recovery signs
Despite the scale of the wipeout, market sentiment is already showing signs of recovery. The Crypto Fear & Greed Index improved by four points to 32, suggesting selling pressure may be losing steam and confidence is returning.
Institutional activity is also adding to this shift. On-chain data shows MSTR recently bought an additional 1,036 BTC. MARA Holdings announced a Q3 net profit of $634.4 million, up from $123.1 million in the previous year. Santiment data reveals a distinct increase in accumulation among retail and mid-sized holders: in the past two weeks, wallets holding 1-10 BTC increased by 10,076 BTC, while wallets holding 10-100 BTC increased by 4,131 BTC.
Potential bear trap
Bitcoin's failure to outperform other assets does not necessarily mean the rally is dying. Despite macro uncertainty and bearish positioning, there are clear signs of increasing institutional exposure and accumulation across wallet classes. If Bitcoin can hold above $75,000, the current divergence could turn into a potential bear trap, with the $87,000 short-liquidity cluster becoming the next major upside target.
