Bitcoin Set for Short Squeeze Before Long Trap in October

A derivatives strategist predicts a significant move in Bitcoin toward the start of October, starting with a short squeeze followed by a potential long trap. This setup is likened more to late 2023 than previous euphoric peaks.

Nik Patel suggests current market positioning resembles December 2023 more closely than March or December 2024.
He anticipates $1.5 billion in short liquidations followed by $2.8 billion in long liquidations by early October.
The balance between spot and derivatives flows differs from past trends, with lower spot volume as a percentage of total volume compared to earlier crossovers.
Real-time funding data shows benign levels, indicating potential for a squeeze without needing to unwind extreme leverage.
Market sentiment remains skeptical, with elevated stablecoin dominance at 6.1%, suggesting sidelined capital could fuel year-end risk-taking post-whipsaw.
Patel's outlook includes an initial short liquidation cascade resetting shorts, followed by potential challenges for over-eager longs around October 7.

Monitoring key indicators like funding rates and stablecoin deployment will be crucial for traders seeking confirmation of these predictions.

At press time, Bitcoin traded at $114,852.

Bitcoin price