Should Bitcoin bears start expecting a short squeeze soon?

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Key Takeaways

Is Bitcoin forming a potential market bottom?

Oh, you betcha! The Buy-Sell Pressure data is flashing some “hello, we’re at the bottom” signs, with Bitcoin hanging out in its “bullish zone,” and short traders are starting to sweat. 😅

What’s driving the current market divergence?

Well, it’s a little drama between institutions and spot investors. They briefly turned into sellers, but rising Funding Rates and some liquidation clusters are hinting at a possible short squeeze – or a market cliffhanger, if you will.

Bitcoin [BTC] is still licking its wounds from the big ol’ crash on October 11th, which sent the market into a bit of a tailspin. Currently hovering at $107,510, the asset’s under some serious selling pressure, but don’t count it out just yet.

Fresh market indicators suggest that maybe, just maybe, the sellers are about to get hit with a curveball. 🥴 If the relief inflows keep up and bullish signals stay strong, a rally could be coming. And short traders? Yeah, they might be in for a loss party.

Bitcoin bottom reach?

Alphractal’s Buy-Sell Pressure data is giving off some potential “bottom forming” vibes. I mean, Bitcoin is still chilling in the green zone, but it’s getting close to the red zone where selling pressure usually throws a tantrum.

Normally, this would mean Bitcoin’s about to take a nosedive. But hold on, because analyst Joao Wedson spotted something juicy:

“The 2025 cycle looks very different – it shows weaker, more subdued demand, nothing close to the euphoric spikes we witnessed in the past.”

Yeah, 2017 and 2021 were party years, but 2025? It’s like Bitcoin’s been on a spiritual retreat, meditating and keeping its cool. The good news? A possible euphoric phase could still be coming, and when it does, it might send Bitcoin soaring.

And guess what? Bitcoin is flexing against gold like it’s ready for a rap battle, showing an 8% gain in the past 24 hours.

So, Bitcoin’s stealing the spotlight from gold, which is over there throwing a tantrum after its steepest single-day decline in over a decade. Classic.

In an email to AMBCrypto, Farzam Ehsani, Co-founder and CEO of VALR, threw in some wisdom:

“Investors taking risk off the table in one asset are likely to seek asymmetric upside in another, especially one still perceived as undervalued and under-owned relative to its potential.”

Institutions and spot investors diverge

So, here’s the plot twist: institutional and spot investors aren’t exactly holding hands in this market. Nope, they’re playing a game of “who can sell the most Bitcoin?”

Institutional investors through U.S. spot Bitcoin ETFs dumped $101.3 million worth of BTC, while retail investors sold an even juicier $165 million. 👀 At the time of writing, they’re like two rival teams trying to outdo each other.

But hold on, this might just be a “cooling off” phase, as both groups were buying up Bitcoin like crazy the day before. Go figure.

Adding some spice, CryptoQuant shows that Bitcoin’s Funding Rate just turned positive, climbing to 0.0067% after dipping below zero. Yeah, it’s getting spicy out there.

This means the short traders might want to start sweating, because the tables could turn fast. 🔥

Short squeeze on the horizon?

Oh, and here comes the drama – the liquidation heat map is hinting that short traders might soon get booted out of their positions. Imagine being the last one at the party and realizing it’s time to leave. 🙃

Bitcoin’s building bullish momentum, and most unfilled orders are hanging out below the spot price. A rally could trigger a short squeeze, sending short sellers running for cover.

Farzam Ehsani is still holding the belief that Bitcoin’s future is looking rosy. He predicts that by Q1 2026, Bitcoin could hit $130,000 – $132,000, as long as we don’t get a surprise from macro volatility.

“BTC could reach $130,000 – $132,000, provided market conditions are not further hampered by macro volatility.”

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2025-10-23 17:44