Bitcoin’s latest rally may be fuelled by smart money using the same mechanism that leads to short squeezes.

Bitcoin (BTC) is up once again, and major players may be behind it. After a week of sideways movement, BTC once again reclaimed the $115,000 level, which restored short-term bullish sentiment across the crypto market.

According to Bitunix analyst Dean Chen, this bullish breakout is likely driven by smart money. In commentary shared with crypto.news, he explained that major funds are “leveraging market liquidity and liquidation effects,” to push Bitcoin past $115,000.

Effectively, this means that institutional players are buying when liquidity is low. This enables their purchases can have outsized effects on the price of BTC, which then invites more traders.

“If $115k holds, smart money may guide the market to clear liquidity up to the $123k – $127k range. Continued ETF accumulation and expectations of macro monetary easing remain the broader backdrop for the bull market,” Chen exclusivly told crypto.news

Macro factors, 401(k) order to push Bitcoin further

The macro outlook, according to several analysts, remains strong for Bitcoin. For instance, Jacob Phillips, co-founder of Lombard Finance, highlighted Donald Trump’s executive order to allow crypto in 401(k). According to Phillips, this is the “largest moment in mass adoption yet.”

It’s likely Bitcoin will be the first available opportunity and the first choice of many Americans, and just a 1% portfolio allocation to Bitcoin brings $120B in new flows,” Jacob Phillips, Lombard Finance

Institutions likely understand this, which is why they are accumulating Bitcoin. On the other hand, according to Arthur Azizov from B2B Ventures, retail investors are circling into smaller-cap tokens.

“Despite Bitcoin’s price holding steady above $110K, its volatility has dropped to the lowest level since 2023 — a time when BTC was trading around just $30K,” Arthur Azizov, B2B Ventures

Expert insights seem to suggest that, unless the macro environment changes dramatically, institutions are likely to continue accumulating Bitcoin. At the same time, retail divestment into altcoins will likely boost the rest of the crypto market.