4 Minutes
Key points
Bitcoin price weakness could end in a large short-liquidation event as bearish traders grow complacent. A widely followed trader says market makers may be engineering a deliberate bear trap to squeeze shorts. BTC price action has already revisited the $113,000 area, triggering significant short liquidations.
Why some traders think this dip is a setup, not a breakdown
Since the mid-August top, Bitcoin price behavior has puzzled many market participants. Rather than seeing decisive lower lows, recent price action has stayed rangebound, and a popular trader known as Luca argues that this pattern is not a bearish signal but a setup engineered by market makers.Luca’s thesis centers on order-book dynamics: market makers keep highs intact and the market confined to a trading band to lull short sellers into a false sense of security. In his words, \"Not one single high got swept\" since the August peak, and that protection of short positions may actually be a prelude to a powerful squeeze.
BTC/USD 12-hour chart. Source: Luca/X
The idea is simple from a liquidity perspective: when shorts accumulate and become confident, they create a dense layer of leverage that can be targeted. If market makers push price slightly higher and trigger stop losses, the resulting cascade of buy orders can rapidly compress short positions, forcing a rapid rally in BTC. Luca points to the consolidation that preceded November’s breakout last year as a historical analogue — a lengthy sideways period that left highs untapped until an explosive upside move.
How a short squeeze plays out
Short squeezes arise when leveraged short positions are forced to close as price moves against them. On crypto exchanges that offer high leverage, these liquidations can be massive and swift, amplifying volatility. Recent on-chain and exchange data supports the view that such a scenario is already underway: BTC revisited the ~\$113,000 level and CoinGlass reports roughly \$100 million in short liquidations in a 24-hour window. The combination of rangebound price action, concentrated short interest, and targeted liquidity runs creates optimal conditions for a large-scale short squeeze. As more shorts are forced out, momentum can accelerate, inviting fresh buying from momentum traders and algorithmic desks.
Is the breakout already confirmed?
Not everyone is convinced that the correction from all-time highs is over. Some analysts expect new lower lows and point to technical divergences as reasons to be cautious. A \$100,000 downside target remains in many models. But others see the recent behavior — and the liquidation heatmap data — as evidence that the correction is concluding and a bullish trend continuation is likely.BTC liquidation heatmap. In practical terms, that means if BTC secures a foothold above that region on daily timeframes, traders will have more confidence that the path higher is intact.
Timing and implications for traders
Luca expects the next major short squeeze to arrive within weeks. For traders and investors, this thesis has several practical takeaways: Risk management is crucial. High-leverage shorts can be wiped out quickly in a squeeze, and long entries placed during a squeeze can also face volatility. Watch order-book imbalances and open interest. Rising open interest combined with a narrowing range often precedes a squeeze. Monitor key levels such as the \$113k region for confirmations of trend continuation.
Bottom line
Bitcoin’s recent rangebound behavior may be more strategic than it appears. If Luca and other market-watchers are correct, market makers could be protecting shorts to build liquidity for a targeted short squeeze that forces a large liquidation event and accelerates BTC price appreciation. Whether that playbook unfolds will depend on how order books, open interest, and macro crypto sentiment evolve over the coming weeks — but for now, the technical setup and recent liquidation data suggest bulls could be gearing up for a decisive move.“Bitcoin has technically fully confirmed its breakout,” said Rekt Capital, while also suggesting a daily close or retest of the ~$113k level would further validate the trend continuation to the upside.
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