Bitcoin's $115K Threshold: Catalyst for a $10B Short Squeeze or a Bear Market Reconfirmation?

Bitcoin's $115,000 threshold has emerged as a pivotal battleground in the cryptocurrency's 2025 price narrative. With leveraged capital flows and on-chain metrics pointing to conflicting signals, the market is split between bullish optimism and bearish caution. This analysis examines the interplay of open interest dynamics, funding rates, and on-chain selling pressure to determine whether the $115K level will trigger a short squeeze or reconfirm a bearish phase.

Leveraged Capital Flows: A Ticking Time Bomb?

Bitcoin's options and futures open interest around $115K reveals a volatile landscape. Data from CoinGlass and Glassnode shows that options open interest has fluctuated significantly near this level, with traders increasingly positioning for both bullish and bearish outcomes, according to a CoinGlass options chart and a Glassnode chart. Meanwhile, futures open interest has stagnated, despite a 40% surge in corporate Bitcoin holdings in Q3 2025, as reported in a Yahoo Finance report. This disconnect suggests that institutional demand, while growing, has not yet translated into price action above $115K.

The recent 17% price drop below $100K has exacerbated leveraged capital flows. Short-term holders, particularly those who bought Bitcoin at $115K in July, are now underwater, triggering margin calls and liquidations, as noted in a Bitcoinsistemi report. For instance, Trump Media & Technology Group (TMTG) saw its Bitcoin holdings lose $490 million in value, compounding broader market losses, as noted in the same report. This liquidity crunch has created a self-reinforcing cycle: falling prices force liquidations, which further depress prices.

However, the market is not entirely bearish. A surge in U.S. spot Bitcoin ETF inflows in October 2025 briefly pushed BTC above $115K, fueled by optimism over U.S.-China trade negotiations, as reported in a Coinotag article. This suggests that leveraged longs remain active, with potential for a short squeeze if the price retests the $115K level.

On-Chain Selling Pressure: A Bear Market Warning?

On-chain metrics paint a mixed picture. The Network Value to Transaction (NVT) ratio, currently at 1.51, suggests Bitcoin remains undervalued relative to its transaction volume, according to a Bitget report. However, technical indicators like RSI and MACD show bearish divergence, with Bitcoin failing to match previous highs in volume or momentum, as noted in a Coinotag analyst warning. This divergence historically precedes corrections, raising concerns about a potential bear market reconfirmation.

Exchange inflow trends further complicate the outlook. While Bitcoin regained $115K in October 2025, capital rotation from gold-down over 9% from its peak-has provided temporary support, as noted in a TradingView article. Yet, on-chain data reveals that short-term holders (those with positions around $112,500) are now underwater, signaling increased selling pressure, as noted in the Coinotag analyst warning. Analyst Doctor Profit warns that a breakdown below $101,700 could trigger a 20-30% correction, with historical patterns suggesting a full bear market confirmation, as noted in the same warning.

The sell wall analysis near $115K adds another layer of complexity. Bitcoin is consolidating between its 100-day moving average (resistance at $115K) and 200-day moving average (support at $109K), as noted in the TradingView article. A sustained close above $115K could target $120K–$122K, but a breakdown below $108K risks exposing deeper retracements, as noted in a CoinEdition article.

Macro Factors: The Wild Card

The Federal Reserve's dovish pivot and the 2025 halving event remain critical tailwinds for Bitcoin, as noted in the Bitget report. However, geopolitical risks-such as Trump's tariff announcements and India's regulatory skepticism-have introduced volatility. For example, a $1.2 billion liquidation event followed Trump's tariff speech, causing a sharp selloff, as noted in the CoinEdition article. These macroeconomic uncertainties amplify on-chain selling pressure, particularly for leveraged positions.

Conclusion: A Tug-of-War at $115K

Bitcoin's $115K threshold is a fulcrum point. On one hand, leveraged longs and ETF inflows suggest a potential short squeeze if the price breaks above this level. On the other, on-chain selling pressure and bearish technical divergence warn of a reconfirmation of the bear market. The outcome will hinge on macroeconomic clarity-particularly the Fed's rate-cut timeline-and whether institutional demand can overcome short-term profit-taking.

For now, the market remains in a delicate balance. Traders must monitor open interest shifts, NVT trends, and exchange inflows to gauge whether the $115K level will act as a catalyst for a $10B short squeeze or a harbinger of further declines.