Bitcoin bulls navigate ‘bullish neutrality’ as shorts fuel upside pressure
Bitcoin trades in a ‘bullish neutrality’ regime as composite indicators improve and short liquidations dominate, creating controlled upside pressure with limited froth.
- Composite regime indicator sits at +16.3 in the upper neutral band, a zone that historically delivered positive 30‑day returns in 2025 backtests.
- Short liquidations dominate, with long liquidation share below 50%, signaling forced short covering as the main driver of current upside pressure.
- A drop of the regime score below 0 plus a flip of liquidation dominance positive would mark exhaustion of the current move and renewed downside risk.
Bitcoin is trading around $88,100 with 24‑hour volume near $34.3 billion, reflecting steady liquidity and tight intraday ranges on major exchanges. Market depth remains robust, with spot and derivatives flows supporting orderly price discovery despite only modest percentage moves over the past day.
Bitcoin price flat
The composite indicator, which combines taker imbalance, open interest pressure, funding rates, ETF flows, exchange flows, and price trends on a scale from negative 100 to positive 100, currently stands at positive 16.3. This places the market in the upper neutral zone, ranging from positive 15 to positive 30.
Backtesting data for 2025 indicates this subzone historically delivered average returns of positive 3.8% over 30-day periods, according to the analysis. This contrasts with the negative 15 to zero subzone, where expected returns were negative 1.5% over seven days. The indicator has recovered from a recent bearish phase, when the score dropped to negative 27 one week ago.
The analysis notes that transitions into the formal bull regime, defined as scores above positive 30, historically coincided with local price tops and delivered negative average returns of negative 3.3% over seven-day periods. This suggests the current positive 15 to positive 30 zone may carry less risk than higher readings, according to the report.
The long/short liquidation dominance oscillator, which measures the difference between long and short liquidation volumes, currently shows a value of negative 11%, while its 30-day moving average remains at positive 10%. Negative values indicate a predominance of short position closures. Long liquidation dominance stands at 44%, below the 50% baseline, confirming the prevalence of short liquidations, the analysis stated.
The predominance of short liquidations creates upward pressure on prices, as forced closures of short positions require buyers to cover their positions, according to derivatives market mechanics.
A return of the regime score below zero, accompanied by a reversal of the liquidation oscillator into positive territory, would signal exhaustion of the current upward momentum, the analysis indicated. Historical data shows the negative 15 to zero subzone delivered negative expected returns of negative 1.5% over seven days.
The analysis characterizes Bitcoin’s current market state as “bullish neutrality,” with the regime score at positive 16.3 and derivatives structure showing predominance of short closures creating buying pressure.
