Bitcoin Surges Past $114,500 as Short Sellers Face Massive Liquidations

Market Breakthrough: Bitcoin Shatters Key Resistance Levels Amid U.S.-China Trade Talks

Bitcoin continued its impressive ascent on October 26, trading around $114,501 by late evening UTC, firmly establishing its position above the significant $112,000 threshold. This latest surge has left short sellers reeling, with liquidations heavily skewed against those betting on price declines. The cryptocurrency’s upward momentum comes at a pivotal moment as markets digest developments in U.S.-China trade relations and prepare for the upcoming Federal Reserve Open Market Committee (FOMC) meeting, which could further influence digital asset valuations in the days ahead.

The day’s rally began with a decisive technical breakout identified by CoinDesk Research analysts, who observed a rapid price escalation from $111,453 to $113,572. The critical movement initiated around 09:00 UTC when trading volume spiked dramatically—approximately 318% above typical session averages—propelling Bitcoin through the psychological $112,000 barrier that had previously capped upward movement. This initial breakthrough gained further momentum throughout the morning hours, establishing consecutively higher price points before activity moderated later in the day. By midday, price action had narrowed into a defined trading range between $113,550 and $113,720, with resistance emerging around $113,700-$113,733 and support solidifying near the $113,300 mark.

Derivatives Market Reveals Painful Consequences for Bitcoin Bears

The impact on derivatives markets has been particularly noteworthy, with CoinGlass reporting $393.74 million in total liquidations over the 24-hour period. The disproportionate distribution of these forced exits tells a compelling story about market sentiment—short positions accounted for $319.18 million in liquidations, dwarfing the $74.45 million from long positions. The single largest casualty was a BTC-USD order on Hyperliquid valued at $19.04 million. This liquidation pattern illustrates a classic market dynamic where traders positioned against the prevailing trend are forced to cover their positions when prices move decisively against them, inadvertently amplifying the very price movement they had bet against. When key resistance levels break, as happened with Bitcoin’s push above $112,000, this cascading effect of short covering can accelerate upward price movement substantially.

Geopolitical Catalysts: U.S.-China Relations Show Signs of Thawing

Diplomatic developments between the world’s two largest economies may have contributed to positive market sentiment across risk assets, including cryptocurrencies. Between 12:29 and 12:36 UTC, the Chinese Embassy in the United States released a series of statements on social media platform X detailing “candid, in-depth and constructive” consultations that took place in Kuala Lumpur between Chinese Vice Premier He Lifeng and high-ranking U.S. officials—Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer. The diplomatic engagement addressed several contentious areas, including Section 301 measures affecting China’s maritime, logistics, and shipbuilding sectors; potential extensions of tariff suspensions; cooperation on fentanyl-related issues; agricultural trade; and export control policies. According to embassy communications, the parties reached “basic consensuses” on these matters, with specific details to be implemented through respective domestic processes.

Vice Premier He Lifeng emphasized that stable U.S.-China trade relations benefit both nations and called for dialogue based on mutual respect and equal footing. His statements referenced implementing “important consensuses” previously established by the two heads of state earlier this year, highlighting the need to manage differences constructively while expanding mutually beneficial cooperation. Both delegations reportedly agreed to utilize established consultation mechanisms and maintain ongoing communication channels to address respective concerns, promoting what was described as “healthy, stable, and sustainable development of bilateral economic and trade relations.” The communications maintained a process-oriented tone focused on long-term relationship building rather than announcing immediate policy changes. This development gains additional significance in light of Friday’s CNBC report indicating that U.S. President Donald Trump is expected to meet Chinese President Xi Jinping on October 30 during the Asia-Pacific Economic Cooperation (APEC) Summit, with the explicit goal of reducing tensions and potentially working toward a trade agreement. Trump was quoted expressing optimism about the planned meeting, stating, “we are going to come out very well.”

Federal Reserve Decision Looms as Critical Market Catalyst

While Bitcoin’s technical breakout and improving U.S.-China relations have supported the recent price action, market participants remain keenly focused on the Federal Reserve’s upcoming two-day FOMC meeting, which concludes on October 29. The central bank’s decision—whether to cut interest rates further or maintain current levels—followed by Chair Jerome Powell’s press conference, will be scrutinized for clues about future monetary policy direction. For cryptocurrency and other risk assets, three critical elements will command attention: the immediate rate decision itself, signals regarding the future trajectory of monetary policy, and the overall tone Powell adopts when discussing economic conditions and inflation expectations. Historically, periods of monetary easing or signals of forthcoming liquidity have correlated with improved performance in risk assets like Bitcoin, while hawkish rhetoric has typically created headwinds.

Technical Analysis: Key Levels to Watch After Bitcoin’s Breakthrough

Looking ahead, technical analysts have identified several critical price zones that may determine Bitcoin’s short-term trajectory. If Bitcoin manages to secure a daily close (UTC) above the $113,700-$114,000 range and subsequently holds this territory, traders will likely shift their attention to the next significant resistance band between $115,000 and $116,000. Conversely, should prices retreat below approximately $113,300 and fail to reclaim this level, a retest of the $111,000 support becomes increasingly probable. A more substantial reversal could potentially revisit the $108,000 region, which served as an important base during previous consolidation phases. As of late October 26 (23:23-23:35 UTC), Bitcoin was trading at $114,501, representing a gain of approximately 2.6% over the reporting period. Intraday price action revealed consistent buyer interest during dips toward the $113,000-$113,300 range after the successful breach of $112,000, while upward price movements encountered resistance near $114,700.

Broader Context: Recovery Within a Larger Market Structure

Examining the broader market context, Bitcoin has demonstrated impressive recovery from mid-October lows near $105,000, though it remains below the early-October highs that approached $125,500. Technical analysts suggest that a daily close above approximately $116,000 would substantially strengthen the case for another challenge of the $120,000-$125,000 resistance zone. This latest rally occurs within a complex macroeconomic environment where investors continue to balance traditional risk factors—inflation concerns, interest rate expectations, and global trade tensions—against Bitcoin-specific narratives including institutional adoption, regulatory developments, and evolving market structure. As traders navigate these multifaceted influences, the cryptocurrency market’s reaction to the upcoming Federal Reserve decision and the outcome of U.S.-China diplomatic engagements will likely provide critical directional cues for Bitcoin’s next significant move.

Disclaimer: Parts of this article were generated with assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.