Bitcoin News Today: Bitcoin's $125K Hurdle Could Trigger $17B Short Squeeze

The Bitcoin market remains in a state of heightened volatility, with a potential $17 billion in short positions at risk of being liquidated should the price surge past $125,000. This scenario, based on data from Coinglass and reported by Finbold, underscores the precarious balance between bullish and bearish sentiment in the digital asset space. The liquidation threshold aligns with a key resistance level tied to previous bull market peaks, including December 2017 and November 2021 [2]. Analysts are closely watching whether Bitcoin (BTC) can break through this level and trigger a short squeeze, which could further propel the price upward.

Meanwhile, technical indicators suggest growing concerns about a potential bearish reversal. The 14-month Relative Strength Index (RSI), a momentum oscillator used to assess the speed and magnitude of price movements, is showing signs of bearish divergence. This occurs when BTC continues to reach new price highs while the RSI forms lower highs, signaling a weakening bullish trend [1]. The divergence has added weight to the idea that the current bull market may be nearing an inflection point , even as traders continue to place large bets on further gains.

Institutional and high-net-worth investors are also showing significant interest in the December BTC call spreads, with strike prices set at $125K and $160K. These block trades, typically negotiated over the counter and involving large sums, indicate a strong expectation of continued price appreciation. According to Wintermute’s OTC Trader Jake Ostrovskis, block flow data shows that traders are preparing for a rally that could extend to $190,000 by year-end [1]. This contrast between technical indicators and market sentiment highlights the complexity of the current market environment.

On the other hand, Bitcoin has faced recent downward pressure, slipping to $110,673 amid failed attempts to hold key support levels. Analyst Michaël van de Poppe warned that without maintaining above $112K, a significant correction could follow. The correction, while potentially painful in the short term, may present opportunities for a longer-term rebound, according to van de Poppe’s analysis [2]. The next critical test will be whether BTC can stabilize above these levels and avoid further losses.

Adding to the uncertainty, the upcoming release of the Personal Consumption Expenditures (PCE) index—the Federal Reserve’s preferred inflation metric—could have a major influence on BTC’s trajectory. The PCE data for July showed a 2.9% annual rate, in line with expectations, and reinforced market speculation that the Fed will cut interest rates at its September 17 meeting. With 87% odds of a quarter-point rate cut priced in by markets, the anticipation of looser monetary policy could support risk-on assets like Bitcoin [3]. However, concerns persist that U.S. President Donald Trump’s proposed policies could push the Fed toward more aggressive debt management, potentially creating additional volatility.

Bitcoin currently trades at around $110,500, down 4.6% for the month. As the market awaits key macroeconomic signals and technical developments, both bulls and bears remain poised for the next major move in BTC’s price action.

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