Bitcoin USD Faces Potential Reversal as Liquidation Risks Mount

Bitcoin USD, currently trading above $108,000, appears stable on the surface. However, a closer examination of liquidation heatmaps and leverage data reveals a different story. The market is setting the stage for a two-sided liquidation event that could drive Bitcoin's price back down to the $102K zone.

Analysts monitoring derivatives flow suggest that the current calm may be concealing one of the most meticulously engineered wipeout setups since the first quarter of 2024. On-chain and trading data indicate that the recent surge to $108K might be a final liquidity sweep rather than a genuine breakout.

Liquidation maps show a classic trap: short liquidations are concentrated between $108K and $110K, while a dense cluster of long liquidations is situated below $102K. This pattern often precedes what traders refer to as a “liquidity sandwich,” where the price of Bitcoin spikes in both directions to eliminate overleveraged positions. This liquidation stack illustrates how traders betting on both sides of Bitcoin USD may be falling into a trap. If Bitcoin first triggers short liquidations (reaching $109K or higher), it could open the door for a sharp reversal that punishes late longs, leading to a chain reaction that pushes the market toward the $102K long wall.

Bitcoin’s OI-weighted funding rate is rising again, turning green across major timeframes. At first glance, this implies bullish sentiment, as more traders are paying to hold long positions. However, the context is crucial. The price has barely moved during this shift, and open interest remains flat, indicating that leverage is building without real momentum. These “hope longs” are often the first to be liquidated. This becomes particularly risky when combined with liquidation heatmaps showing dense short liquidations above $108K. If the market moves up to trigger those stops, it could create a short-term spike that falsely confirms a breakout, only to trap late longs and reverse violently. In this context, Bitcoin USD funding data is acting more like bait than confirmation, essentially luring leverage into a sweep-and-dump zone.

On the surface, Bitcoin USD’s ascending wedge breakout appears promising. However, the Chaikin Money Flow (CMF) tells a different story. Despite the push to $108K, CMF is flatlining, hovering just above neutral. In a healthy breakout, we would expect CMF to spike, indicating that institutional or large-scale capital is flowing in. Instead, volume is thinning, and the breakout candles show low conviction. Without strong inflows or rising CMF, Bitcoin USD is structurally weak despite holding the $108K level. This raises a red flag: Is the breakout real, or just another engineered sweep? From a structural standpoint, the price is nearing the apex of the wedge, but without volume or money flow confirmation, it becomes the perfect technical trap. If CMF continues to weaken while the price hovers near $109K, the likelihood of a false breakout for Bitcoin USD and a reversal toward the $102K liquidation cluster increases sharply.