$10.2B Bitcoin Liquidation Looms: Can BTC’s Next 10% Pump Trigger a Short Squeeze?

 

Bitcoin Short Squeeze Alert: $10.2 Billion in Liquidations Possible If BTC Rises Just 10%

A minor move in Bitcoin’s price could have massive consequences. Analysts are warning that a 10% surge in Bitcoin ($BTC) could trigger as much as $10.2 billion in short liquidations, potentially sparking one of the largest short squeezes in crypto history.

The data paints a volatile picture for the world’s biggest cryptocurrency — one where a small upward push could turn hesitation into hysteria and send prices soaring in a matter of hours.

$10.2 Billion in Short Positions at Risk

Crypto analyst Ash Crypto highlighted that if Bitcoin’s price were to rise by just 10% from its current levels, billions in short positions would automatically close. These are leveraged trades betting that the price of Bitcoin will fall. When these positions are liquidated, traders are forced to buy back Bitcoin to cover their losses — fueling even more upward momentum in what’s known as a short squeeze.

In essence, one spark could set off a chain reaction. Once short positions begin to unwind, automated liquidations can accelerate rapidly, creating a feedback loop that sends the price sharply higher.

“The setup is classic,” Ash Crypto explained. “We have overloaded short interest, thin liquidity, and macro catalysts that could easily trigger a sharp reversal. If Bitcoin moves up 10%, it could easily cascade into one of the largest liquidations we’ve seen this year.”

ETF Outflows Signal Market Caution — But Opportunity Too

According to data compiled by Wu Blockchain, U.S. spot Bitcoin exchange-traded funds (ETFs) recorded a net outflow of $367 million on October 17, marking the third consecutive day of withdrawals.

Ethereum ETFs weren’t spared either, with $232 million flowing out across all nine funds — none of which saw any inflows.

The pattern reflects caution among institutional investors, who appear to be taking profits or rotating capital elsewhere amid global macroeconomic uncertainty. However, analysts warn that heavy outflows often precede sharp reversals, as liquidity dries up and sentiment turns overly bearish.

Historically, these periods of hesitation tend to precede strong rallies — particularly when combined with rising open interest and growing short exposure. If Bitcoin liquidations occur, the squeeze could ignite renewed bullish momentum across the entire digital asset sector.

BTC Price Analysis: Sideways Trading Before the Storm

At press time, Bitcoin trades around $106,948, gaining roughly 1% over the past 24 hours but still down 5% for the week. The market has been moving sideways within a tight consolidation range, suggesting traders are waiting for a major trigger.

Technical indicators provide mixed signals but lean slightly bullish:

• RSI (Relative Strength Index): 46.4 — neutral territory, signaling balance between buying and selling pressure.

• MACD (Moving Average Convergence Divergence): Flattening, but showing early signs of a bullish crossover, hinting that momentum could shift upward soon.

• Support: $106,000 — key psychological and structural level.

• Resistance: $107,800–$108,500 — critical range to watch for a breakout.

If Bitcoin breaks above the $108,500 resistance, it could trigger a wave of short liquidations, sending the price toward $112,000–$115,000. On the other hand, failure to hold $106,000 support could result in a brief pullback toward $105,000 — though long-term sentiment remains positive.

Market analysts describe the current setup as a “coil phase” — a quiet consolidation before a potential breakout. In other words, the next big move could be imminent.

Why a Short Squeeze Feels Inevitable

The question many traders are asking: Will Bitcoin rise 10% from here? Several macro and on-chain indicators suggest the odds are increasing.

1. Trump’s Rate Cut Hints Ignite Risk Appetite

Former President Donald Trump’s latest economic remarks — suggesting massive rate cuts if re-elected — have stirred optimism among investors. Lower interest rates generally lead to increased risk-taking, as borrowing costs decline and capital flows into alternative assets like Bitcoin and gold.
“Lower yields make Bitcoin more attractive as a speculative asset,” said market analyst Maria Roberts. “If the Fed pivots to easing sooner than expected, it could unleash a flood of liquidity into crypto.”

2. Coinbase Premium Gap Flashing Bullish Signal

The Coinbase Premium Index, which measures the price difference between U.S. and international Bitcoin markets, recently turned red — a pattern last seen in March–April 2025, just before a 60% rally. This suggests U.S. institutional investors may be quietly accumulating BTC, laying the groundwork for a larger breakout.

3. Binance Accumulation Trends

On-chain tracking reveals Binance wallets have been steadily accumulating Bitcoin over the past two weeks. Historically, this type of exchange-level buying has often preceded large upward moves. Large holders — or “whales” — seem to view the current dip as a “buy-the-dip” opportunity rather than the start of a downturn.

4. Short-Term Holder Realized Price Zone

According to on-chain expert Martinez Ali, the short-term holder realized price — a metric tracking the average cost basis of recent buyers — has reached a zone historically associated with bottom formation. Each time this level has been reached in the past, Bitcoin has rebounded strongly within days or weeks.

Taken together, these factors build a compelling case for an imminent short squeeze scenario.

Institutional Psychology and Market Mechanics

Beyond technicals, much of the tension lies in market psychology. Many short traders have become overconfident after Bitcoin’s brief dip from $112K to $106K. Meanwhile, institutional investors are quietly repositioning for a potential rebound, hedging risk by building long exposure through derivatives.

“When everyone leans in one direction, the market tends to move the other way,” said Daniel Kim, Head of Market Strategy at BlockTower Capital. “Bitcoin’s open interest is at near-record highs, and funding rates are turning negative — the perfect setup for a squeeze.”

Furthermore, data from Coinglass shows that more than $1.1 billion in leveraged short positions are clustered around the $108K–$110K level. If Bitcoin breaches that range, algorithmic liquidations could cascade rapidly — pushing prices upward with surprising force.

Macro View: Crypto’s Role in a Shifting Economy

While short-term traders watch resistance levels, long-term investors are focused on broader trends. Global liquidity remains tight, but central banks in Asia and Europe are beginning to hint at policy easing. Combined with slowing inflation and growing institutional acceptance of Bitcoin — including in Japan, where regulators are preparing to let banks hold BTC — the environment for digital assets is steadily improving.

Meanwhile, geopolitical uncertainty, rising sovereign debt, and currency devaluation fears are encouraging wealth managers to consider Bitcoin as a portfolio hedge. If sentiment flips bullish, institutional inflows could dwarf retail participation.

“Crypto markets often move in waves,” said economist Elaine Wu. “Right now, we’re in the accumulation wave — and that’s when the smart money usually positions itself before the public rushes in.”

Conclusion: $108.5K Is the Line to Watch

For now, Bitcoin remains range-bound near $107K, but all eyes are on the $108.5K level — the trigger point for potential large-scale liquidations. A confirmed breakout above that zone could unleash a domino effect that sends prices surging toward $112K–$115K, or even higher if momentum builds.

Conversely, a failure to hold above $106K may cause a temporary dip, but the underlying data — from accumulation signals to macro catalysts — suggests the bulls are preparing for the next move.

In short, Bitcoin’s market is like a compressed spring. The longer it consolidates, the more explosive the next move could be. And with $10.2 billion in short positions hanging by a thread, even a modest 10% rally might be all it takes to flip the entire market upside down.

Writer @Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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