Key points:
- Bitcoin’s price dip may set the stage for a massive short squeeze as bearish traders grow overconfident.
- Fresh analysis points to market makers engineering a large-scale bear trap, with BTC already rebounding to $113,000 and wiping out clusters of short positions.
Bitcoin is gearing up for its “next major short squeeze” in the coming weeks as market makers set the stage for a decisive bear trap.
In a new outlook this week, trader Luca predicts BTC price action could mirror the breakout seen in late 2024.
Market makers keeping bears ‘complacent’
According to Luca, Bitcoin exchange order books may reveal the roadmap for BTC/USD, with the advantage leaning toward the bulls.
Reviewing recent moves, he argues that the lack of new higher highs should not be read as bearish.
“Look at how $BTC has traded since the mid-August peak — not a single high has been taken out,” he noted.
“I think the reason is that shorts are getting protected on the short-term.”
The idea is that market makers are deliberately holding Bitcoin in a tight range to give short sellers a false sense of confidence in their positions.
“We saw the same playbook in 2024 — during that long consolidation phase when highs stayed untouched until the breakout finally came in November,” the post explained, pointing to last year’s seven months of sideways movement.
The longer such a scenario goes on, the more “complacent” bears become, setting up ideal conditions for a short squeeze liquidation event. Luca concluded:
“I believe this is what will lead to the next major short-squeeze in the coming weeks and even though it may seem counterintuitive, I think that shorts getting protected right now and the highs not getting swept is a very positive indication moving forward.”
BTC breakout “fully confirmed”
Despite widespread expectations for fresh lower lows, with $100,000 still a favored downside target due to bearish divergences on key indicators, Bitcoin is defying the outlook.
BTC/USD climbed back to $113,000 on Friday, with CoinGlass data showing nearly $100 million in short liquidations across the crypto market in the past 24 hours.
That rebound was enough for some analysts to declare the correction from mid-August all-time highs officially over.
“Bitcoin has now technically confirmed its breakout,” trader and analyst Rekt Capital wrote on X, sharing an updated chart.
“A Daily Close and/or retest of the ~$113k region (red) would ensure additional trend continuation to the upside.”
