Bitcoin short squeeze risk remains near-term as BTC tests the $111,000 level. With about $14 billion in cumulative short bets exposed to liquidation if BTC reclaims the zone, a breakout could push price toward the all-time high near $124,000. Negative funding signals and thinning open interest amplify near-term volatility.
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Bitcoin short squeeze risk rises when BTC revisits the $111,000 zone, aided by roughly $14 billion in short bets ready for liquidation.
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Negative funding rates persist even as price stabilizes near $107k, indicating lingering short pressure.
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On-chain metrics show BCMI around neutral 0.5, with MVRV near 1.8 and SOPR around 1.02, signaling a mid-cycle correction rather than a macro top.
Bitcoin short squeeze risk rises as BTC eyes $111k—unlock on-chain data, funding signals, and risk insights to navigate the next price move and protect capital.
What is a Bitcoin short squeeze and why is it relevant now?
Bitcoin short squeeze occurs when rapid buying pressure forces the liquidation of leveraged short positions, triggering sharper price moves to the upside. In the current setup, investors face pronounced short exposure and negative funding signals that raise the risk of a sudden breakout if BTC reclaims key resistance near $111,000. Analysts highlight that a breach of this level could ignite a cascade of liquidations and a move toward recent highs around $124,000, though the path will depend on momentum and risk appetite.
How do on-chain indicators inform traders about the current risk?
On-chain data provide a layered view of market health. CryptoQuant’s Bitcoin Combined Market Index (BCMI) sits near 0.5, the neutral mid-zone between overvaluation and undervaluation. In previous cycles, a retest of roughly 0.45–0.5 has preceded renewed expansion. Current readings suggest a cooling phase where speculative activity wanes and value metrics reset. Bitcoin’s MVRV hovers near 1.8, and the SOPR sits close to 1.02, indicating a balance between profit-taking and accumulation rather than an imminent macro top. As analyst Woominkyu notes, a BCMI move from 0.5 toward 0.6 could resume upside momentum, while a break below 0.45 could extend consolidation.
The market is in disbelief, unsure what to do
Market watchers describe a “disbelief phase”—a psychology where prices may rise but confidence remains fragile after negative corrections. Funding rates have stayed negative, around -0.004% for six of the past seven days, signaling persistent short positioning despite stabilization above the $107,000 level. Exchange flow data show roughly 18,000 BTC leaving exchanges and about 16,000 BTC returning in, suggesting a modest net outflow and cautious accumulation as traders await clearer direction. A sustained move above $111,000 would test near-term resistance, while a break below the $107,000 support zone could tilt the sentiment toward renewed selling pressure.
BTC futures open Interest. Source: CoinglassObservers also point to evolving investor flows: approximately 18,000 BTC have exited exchanges recently, while around 16,000 BTC have flowed back in. While the net outflow hints at some accumulation, the overall sentiment remains cautious. Bulls must defend the $107,000 support to prevent a renewed bout of selling pressure, whereas a successful retest of $111,000 could draw in new buyers and trigger volatility as shorts scramble to cover.
Frequently Asked Questions
Will Bitcoin reach a new all-time high in this cycle?
Analysts note the path to fresh highs hinges on momentum above key levels. If BTC can reclaim and hold above $111,000, upside pressure could intensify toward the prior peak around $124,000. However, the current data emphasize a mid-cycle correction rather than a macro top, so a sustained rally would require a shift in funding dynamics and on-chain confidence.
Is Bitcoin heading for another short squeeze soon?
In plain language, a squeeze is more likely if negative funding persists and selling pressure fades. The latest readings show negative funding and elevated short exposure, but a decisive move above $111,000 with renewed bullish conviction could trigger rapid liquidations and a swift price uptick. Caution remains, as volatility can accelerate quickly if momentum shifts.
Key Takeaways
- Near-term risk tied to reclaiming $111,000: A break above this level could trigger a short squeeze with significant short-liquidation pressure.
- On-chain metrics point to a mid-cycle correction: BCMI near neutral, MVRV around 1.8, and SOPR near 1.02 suggest balance between profit-taking and accumulation.
- Flows show cautious accumulation: Net exchange outflows are modest, indicating players are watching for clearer directional signals before committing.
Conclusion
Current data from on-chain metrics, funding signals, and exchange flows support a mid-cycle correction with a heightened risk of a short squeeze if Bitcoin reclaims the $111,000 threshold. While the potential for a move toward the all-time high exists, a cautious approach and robust risk management are prudent. COINOTAG will continue to monitor key levels, publish updates, and provide analysis as new data emerge.
