Bitcoin Futures Structure Favors Bulls as Short Liquidations Signal…

Bitcoin is once again testing the $90,000 threshold, with market participants cautiously optimistic after a period of significant volatility and sustained selling pressure. While sentiment remains fragile and many investors maintain defensive positions, recent price stabilization has opened the door for a potential short-term recovery. Rather than relying on speculative optimism alone, analysts are increasingly pointing to structural indicators that suggest the balance of risk may be shifting in favor of the bulls.

According to a report by on-chain analyst Axel Adler, Bitcoin’s current setup shows tactical upside potential when viewed through the combined lens of market regime indicators and derivatives liquidation dynamics. Adler highlights that Bitcoin’s Regime Score has recently transitioned into the +15 to +30 zone, a range that has historically delivered positive average returns. This zone represents an early recovery phase, where downside momentum has faded but euphoria has not yet returned, often creating favorable conditions for asymmetric upside.

At the same time, derivatives data show a clear dominance of short liquidations, meaning that recent price moves have forced bearish positions to close. This creates mechanical buying pressure, which can amplify upward moves even in the absence of strong spot demand. Together, these signals suggest that Bitcoin’s current attempt to reclaim $90,000 is not purely speculative but supported by an improving internal market structure.

Regime Score and Liquidations Point to Tactical Upside

Adler explains that Bitcoin’s composite Regime Score aggregates multiple market dimensions into a single framework, including taker imbalance, open interest pressure, funding rates, ETF flows, exchange flows, and price trend. The result is a unified indicator ranging from −100 to +100, designed to capture shifts in market structure rather than short-term noise. Currently, the Regime Score stands at +16.3, placing Bitcoin in the upper part of the neutral zone, defined between +15 and +30.

Backtesting data for 2025 shows that this specific subzone has historically delivered average returns of around +3.8% over a 30-day horizon. This contrasts sharply with the −15 to 0 zone, where expected returns were negative, averaging -1.5% over seven days. Importantly, the indicator has recently rebounded from a bearish extreme, after dropping to −27 just a week ago, signaling a structural recovery rather than a random bounce.

Adler highlights a critical nuance: transitions into the formal bull regime above +30 have historically coincided with local tops, often followed by negative short-term returns. This makes the current +15–30 range more attractive for tactical positioning, while aggressive accumulation above +30 may carry elevated risk.

This view is reinforced by derivatives data. The long/short liquidation dominance oscillator has turned negative at −11%, indicating a surge in forced short closures, while its 30-day average remains positive. With long liquidation dominance at just 44%, short liquidations are clearly prevailing, providing additional mechanical fuel for upside.

Bitcoin Tests Key Support as Volatility Compresses

Bitcoin is currently trading around the $90,000 area after a sharp corrective move from recent highs, and the chart highlights a market at an important inflection point. Following the breakdown from the $105,000–$110,000 range, BTC experienced a swift decline that pushed the price below the short- and medium-term moving averages. The blue and green moving averages have rolled over, confirming a loss of upside momentum and signaling a shift toward a more defensive market structure.

However, price is now stabilizing just above the psychologically critical $88,000–$90,000 zone, which has acted as a reaction level over recent sessions. This area aligns closely with prior consolidation and represents a short-term support cluster where buyers are attempting to regain control. Notably, selling pressure appears to be moderating, as the most aggressive downside move has already occurred, and recent candles suggest consolidation rather than continuation.

The red long-term moving average remains well below the current price, indicating that the broader trend is still intact, but the immediate battle is being fought around the $90,000 mark. A decisive break above this level could trigger a wave of short covering, potentially reignite bullish momentum.

Market Sentiment and Investor Behavior

Recent weeks have seen a notable shift in investor behavior, with many adopting a wait-and-see approach. The fear and greed index, which had been hovering in extreme fear territory, has begun to moderate, suggesting that the worst of the selling may be behind us. However, caution remains the order of the day, as evidenced by the relatively low volumes and lack of aggressive buying.

Institutional flows have also been mixed, with some ETFs seeing outflows while others experience modest inflows. This divergence highlights the uncertainty that still pervades the market, but the overall trend suggests a gradual return of confidence.

Technical Analysis and Key Levels

From a technical perspective, Bitcoin is currently testing a critical juncture. The $90,000 level has acted as both support and resistance in the past, making it a key battleground for bulls and bears. A break above this level could open the door to a retest of the $95,000–$100,000 range, while a failure to hold could see a retracement toward $85,000 or lower.

The relative strength index (RSI) is currently in neutral territory, indicating that there is room for further upside without entering overbought conditions. Similarly, the moving average convergence divergence (MACD) is showing signs of a potential bullish crossover, which would be a positive signal for short-term momentum.

Conclusion

Bitcoin’s current market structure, as evidenced by the Regime Score and derivatives liquidation dynamics, suggests that the balance of risk may be shifting in favor of the bulls. While sentiment remains fragile and the market is still in a recovery phase, the technical and on-chain indicators point to a potential short-term upside. However, investors should remain cautious, as the market is still susceptible to sudden shifts in sentiment and external factors.

Looking ahead, the key levels to watch are $90,000 on the upside and $88,000 on the downside. A break above $90,000 could trigger a wave of short covering and reignite bullish momentum, while a break below $88,000 could see a retest of lower supports. As always, risk management and position sizing remain paramount in such a volatile environment.

Frequently Asked Questions

What is the Regime Score and how does it work?
The Regime Score is a composite indicator that aggregates multiple market dimensions, including taker imbalance, open interest pressure, funding rates, ETF flows, exchange flows, and price trend. It ranges from -100 to +100 and is designed to capture shifts in market structure rather than short-term noise.

Why are short liquidations important for Bitcoin’s price?
Short liquidations occur when bearish positions are forced to close due to adverse price moves. This creates mechanical buying pressure, which can amplify upward moves even in the absence of strong spot demand.

What are the key support and resistance levels for Bitcoin?
The key support level is around $88,000, while the key resistance level is at $90,000. A break above $90,000 could open the door to a retest of the $95,000–$100,000 range, while a break below $88,000 could see a retracement toward $85,000 or lower.

How has institutional sentiment changed recently?
Institutional sentiment has been mixed, with some ETFs seeing outflows while others experience modest inflows. However, the overall trend suggests a gradual return of confidence, albeit with caution.

What is the current fear and greed index reading?
The fear and greed index has moderated from extreme fear territory but remains in cautious territory, reflecting the ongoing uncertainty in the market.

As Bitcoin continues to navigate this critical juncture, investors should keep a close eye on the key levels and indicators discussed above. While the structural setup favors the bulls, the market remains volatile and susceptible to sudden shifts. Stay informed, manage risk, and always do your own research.