Bitcoin News Today: Bitcoin and Ether near key levels as record short positions build ahead of potential squeeze

Bitcoin and Ether are showing early signs of a potential short squeeze as speculative traders build record leveraged short positions, particularly in Ethereum. According to data from CME Group, Ether traders have created the largest-ever leveraged short position on the altcoin, a development that has attracted attention from analysts and traders monitoring the market for turning points [1].

Bitcoin, currently trading near $116,000, has pulled back from recent lows, with bulls attempting to challenge the cluster of short positions that have accumulated in recent weeks. The BTC/USD pair saw overnight losses ease after dipping near $115,000, while the broader crypto market experienced a liquidation event totaling approximately $500 million in long positions over the past 24 hours, as reported by CoinGlass [1].

Despite the bearish positioning, some traders remain cautious about the possibility of a short squeeze unfolding. Popular trader and analyst BitBull noted on X that while Bitcoin may consolidate between $112,000 and $120,000 in the third quarter, a breakdown below $112,000 could signal a capitulation move, similar to the recent rally above $124,000 [1]. Analyst Michaël van de Poppe echoed this sentiment, suggesting a failure to break above $116,800 could trigger a sweep of short-term lows and mark the beginning of a bear market [1].

The build-up of speculative positions is not limited to Bitcoin. Barchart highlighted that Ethereum short positions have reached a historic peak, suggesting that traders are aggressively betting against the altcoin [1]. CoinGlass data further indicated that key short liquidation levels for Bitcoin are concentrated around $116,500, a threshold that could become a flashpoint for a reversal in sentiment if longs manage to push through [1].

The broader macroeconomic environment is also influencing trader behavior. With the U.S. Federal Reserve's Jackson Hole symposium scheduled for this week, crypto traders are de-risking ahead of the potential policy hints that may emerge from the event. Trading firm QCP Capital noted that the recent higher-than-expected producer price index (PPI) data has complicated the Fed’s policy outlook, making the central bank’s upcoming statement and rate projections highly anticipated [1].

In its latest analysis, QCP Capital predicted a sideways trading pattern for Bitcoin, with dips near $112,000 likely to attract buyers, while rallies toward $120,000 could face resistance from selling pressure. This scenario is expected to persist until Friday, when Fed Chair Jerome Powell is set to address the market [1].

While the short-term outlook remains uncertain, the accumulation of leveraged shorts and the proximity of Bitcoin to key support and resistance levels suggest that volatility is likely to remain high in the coming days. As the market awaits policy cues from the Fed and monitors order-book dynamics, the potential for a short squeeze looms on the horizon, with Ether at the center of a historic bearish bet [1].

Source: [1] Bitcoin, Ether set for squeeze as traders go record short ETH at $4.3K (https://cointelegraph.com/news/bitcoin-ether-eye-short-squeeze-as-traders-build-largest-ever-eth-short)