If bitcoin rebounds to $72,000, an estimated $2.5 billion in short positions betting on declines in the futures market could be liquidated. With short positions having built up excessively, some see the possibility of a so-called short squeeze if war risks ease or funds flow back into spot exchange-traded funds (ETFs).

Coinglass estimates, cited by blockchain outlet Cointelegraph on April 4, show that if bitcoin rises 7.5 percent from $67,100 to reach $72,000, total bitcoin futures short positions of $2.5 billion would enter a liquidation zone. If short liquidations triggered by a move through a key price range lead to chain-buying, the pace of gains could steepen further.

A surge in oil prices after the U.S.-Iran war was cited first as a backdrop to the increase in shorts. Oil rose to its highest level since June 2022, weighing on risk assets broadly, it said. Oil has jumped more than 70 percent since the war began in late February, raising logistics costs and weakening consumer spending power, which was also cited as a risk.

Company-specific selling factors also overlapped. Bitcoin miner MARA Holdings said it sold 15,133 BTC on March 26, which was assessed as potentially adding further selling pressure. The company said it reduced its bitcoin holdings to shift its focus to artificial intelligence (AI) computing and cut debt.

Macroeconomic variables were also presented as factors that fueled short sentiment. The S&P 500 index fell 10 percent through March 30 after peaking around 7,000 points on Jan. 28. Inflation has reduced room for central banks to cut rates, raising recession worries, an interpretation said. Another explanation said the market is pricing an 89 percent chance that the U.S. Federal Reserve will hold rates through September, and a 5 percent chance of raising them to 4 percent.

In derivatives markets, it is notable that perpetual futures funding rates have fallen into negative territory. In a neutral market, long position holders often bear costs, and funding rates are often formed in a 5 to 10 percent range. By contrast, a negative funding rate suggests weak leveraged long demand and the possibility that short crowding has increased.

A ceasefire and a resumption of spot ETF inflows are cited as rebound catalysts. While the outcome of the war cannot be predicted, a ceasefire agreement could quickly restore investor sentiment and catch short positions off guard, it said.

For ETFs, an example was cited in which bitcoin rose from $69,150 to $74,900 over the five days ending March 16. At the time, U.S.-listed spot bitcoin ETFs recorded net inflows of $1.5 billion over two weeks, followed by a scenario in which a resumption of inflows could make a recovery to $72,000 possible.

Separately, U.S. President Donald Trump was reported to have asked Congress, in relation to a 2027 budget proposal, to increase defence spending to $1.5 trillion. According to CNBC, Trump said at a White House closed-door event, "We are fighting a war. We can’t worry about childcare for kids." Still, given that bitcoin is trading 47 percent below its all-time high (ATH) in October 2025, some also raised the possibility that demand for it as an alternative hedge could flow in if economic momentum slows or market stress grows.