Bitcoin's $108,500 Target: Why the Breakout Keeps Failing - and How a Short Squeeze Could Force a Path Forward

Bitcoin's $108,500 level has emerged as a pivotal battleground in late 2025, with technical resistance, whale behavior, and short-position dynamics creating a complex web of forces that repeatedly stall upward momentum. Despite institutional accumulation and a weakening U.S. dollar, the price remains trapped in a consolidation phase, with critical on-chain and derivatives metrics pointing to both fragility and potential catalysts for a breakout.

Market Structure: A Wall of Resistance

Bitcoin's inability to breach $108,500 is rooted in its technical structure. The 200-day simple moving average (SMA) currently sits at $107,846, acting as immediate resistance, while the 365-day SMA at $100,367 forms a broader ceiling. This creates a "squeeze" between two major trendlines, with liquidity concentrated in the $108,500–$110,500 range. The relative strength index (RSI) has formed an inverse head and shoulders pattern-a bullish signal-but confirmation remains pending according to analysis. Meanwhile, a "death cross" on the daily chart, where the 50-day SMA fell below the 200-day SMA, underscores bearish momentum (https://ki-ecke.com/insights/bitcoin-bear-market-indicators-2025-how-to-spot-2-signals/).

Derivatives data compounds the bearish narrative. Negative 25-delta skew indicates heightened demand for downside protection, while futures open interest has dropped by 20%, signaling a leverage reset in speculative markets according to analysis. This reduction in leverage suggests traders are managing risk rather than exiting entirely, but it also highlights the fragility of current price action according to data.

Whale Behavior: Accumulation vs. Distribution

On-chain metrics reveal a nuanced picture of whale activity. The number of entities holding at least 1,000 BTC has surged to 1,436, a reversal from months of net selling by large holders according to reports. Glassnode's accumulation trend score for entities holding over 10,000 BTC now stands at 0.8, reflecting strong buying pressure. However, this accumulation has slowed in recent weeks, with smaller retail investors stepping in during price dips according to data.

Whale transactions have also spiked, with over 102,000 transactions exceeding $100,000 and 29,000 surpassing $1 million recorded in a single week . Notably, BlackRock and other institutional players have been transferring BTC to exchanges, suggesting strategic position adjustments . For example, Bitcoin Whale Owen Gunden deposited 2,499 BTC into Kraken, valued at $228 million, while simultaneously selling over 11,000 BTC in the past month-a mix of liquidity management and tactical rebalancing .

Despite these signs of accumulation, the broader market remains under pressure. Exchange balances have declined as users move assets into private wallets, and short-term holders have incurred $5.7 billion in realized losses. This indicates a correction phase, but also a market where weaker positions are being flushed out according to analysis.

Short Squeeze Potential: A Double-Edged Sword

The $108,500 level is not just a technical barrier-it is also the average cost basis for the top 15% of Bitcoin investors according to Glassnode data. Historical data shows this level triggers increased selling pressure during market recoveries, but current derivatives data suggests a different dynamic. Coinglass reports a high concentration of leveraged short positions above $108,500, raising the potential for a short squeeze if Bitcoin breaks through (https://www.thecoinrepublic.com/2025/05/21/why-this-trader-changed-his-stance-on-bitcoin-price-after-118k-prediction/).

A short squeeze could force traders to buy back BTC to limit losses, creating a self-reinforcing upward spiral. This scenario is amplified by the fact that large holders have absorbed 240% of Bitcoin's annual issuance, creating a supply-demand imbalance according to analysis. However, macroeconomic risks-such as hawkish monetary policy in Japan and weak Chinese economic indicators-remain critical variables .

The Path Forward: Balancing Forces

Bitcoin's next move hinges on three factors: 1. Retail Selling Behavior: If retail investors continue buying dips, it could stabilize the $80,000–$83,000 realized-demand region . 2. U.S. Economic Data: The November 20 Jobs report could trigger a relief rally or deeper sell-off, depending on outcomes . 3. Short Position Dynamics: A breakout above $108,500 could ignite a short squeeze, but macroeconomic headwinds may delay this scenario.

Institutional inflows and a weakening dollar provide a floor, but the market remains vulnerable to volatility. As Timothy Misir of BRN notes, the current divergence between whale accumulation and retail activity is a "classic late-cycle dynamic" .

Conclusion

Bitcoin's $108,500 target is a microcosm of the broader market's contradictions. While technical resistance and short-position concentration create headwinds, whale accumulation and potential short squeezes offer a path forward. Investors must navigate this fragile equilibrium, balancing optimism about institutional demand with caution over macroeconomic risks. The coming weeks will test whether Bitcoin can break free of its consolidation phase-or if it will succumb to the forces holding it in check.