Analyst: Bitcoin’s minor rebound is driven by short liquidations, its sustainability remains to be seen.

Analyst Axel Adler Jr. pointed out that over the past 24 hours, Bitcoin has climbed from $76,300 to $77,400, as the market’s buying-selling power balance has shifted toward buyers. Short positions make up the vast majority of liquidations: traders who bet on a price decline have been forced to close out their positions, a move that has in turn supported the upward price trend. The liquidation pressure oscillator rose from +0.48 a day prior to +54.52 as of September 18, and has stayed positive since the morning of September 17, signaling that the current short covering-driven dynamic remains in place. The analyst also flagged the fragility of this advantage: if the liquidation pressure oscillator drops back to zero, the liquidation balance will shift back to favor longs, and forced liquidations of bullish positions will generate selling pressure and deepen a downturn. This rally is clearly characterized by being driven by a short squeeze, with buying power only established over the past several hours. Whether this can translate into a more sustained upward move hinges on whether the liquidation structure can hold in a range favorable to longs.