Bitcoin wipes $180mln in shorts – So why hasn’t BTC broken out yet?

Key Takeaways

Why is Bitcoin at risk of looping lower?

Bitcoin is at risk of looping lower because thin bid support and stacked leverage leave it exposed to liquidation cascades before any short squeeze can trigger.

What would signal bulls taking control?

Flipping $112k into a higher-low base and holding above $108k would give Bitcoin bulls footing to rebuild momentum.

Bitcoin [BTC] is sitting at a key inflection zone.

The 12H Liquidation Heatmap highlighted stacked leverage across key price levels, leaving both bulls and bears exposed. In that backdrop, the past 24 hours played out as a bear trap for bulls.

Bitcoin faces leverage trap

CoinGlass data showed over $330 million liquidated, with 53% coming from shorts. That’s the second straight day of short squeezes.

And yet, it is still a far cry from the $2 billion long squeeze from last week.

Source: CoinGlass

In short, momentum’s still lagging.

Despite BTC’s 9% dip from its all-time high, bulls haven’t fully locked in a market flip yet. Meanwhile, Bitcoin’s Open Interest (OI) has popped back over $80 billion, setting up a classic leverage-driven volatility trap.

Simply put, the market’s still looping, with no solid bid-wall to trigger a breakout.

Backing this, on Binance, the 24H Long/Short Ratio sat dead even at 50:50, keeping both sides on edge.

Bitcoin bulls still fighting for market control

September is ending on a pivotal swing for Bitcoin ahead of Q4.

At press time, BTC traded near $112,913 after a 1.12% drop. The lower wick probed $112k.

To confirm a bullish divergence, it needed a close above $108,65 (potential first higher low in nearly two weeks), giving bulls a base to rebuild momentum.

In trader terms, bulls need this support flip to hold if they want the Q4 upside thesis to stay alive. Otherwise, BTC risks looping lower, with the massive leverage stacking in the Derivatives market.

Source: TradingView (BTC/USDT)

On the flip side, the setup could fuel a squeeze if bulls defend successfully.

Short clusters set up risk-reward squeeze

Glassnode data showed that over the weekend of the 28th of September, BTC Futures built significant short exposure around $110k–$111k, setting up a classic liquidation cluster ready to be tapped.

However, as noted above, bids remain thin.

That left BTC at risk of dipping lower before any squeeze could fire.

A breakdown under $108,650 remained possible. Flipping $112k into a higher-low base was now the key buffer for bulls to defend the Q4 thesis.