Traders on Edge as Bitcoin’s 2024 Echoes Signal Potential Squeeze

Bitcoin Could See 2024-Style Long Squeeze as Derivatives Overheat and STHs Near Breakeven September 16, 2025

Market observers are increasingly citing parallels between current Bitcoin (BTC) market dynamics and the 2024 bull run, with derivatives exposure and on-chain metrics suggesting the potential for a long squeeze. As derivatives volumes surge and short-term holder (STH) costs approach breakeven levels, traders and analysts are closely monitoring whether these conditions could lead to a rapid price acceleration. The current environment is marked by a growing concentration of open interest in leveraged positions, with a significant portion of BTC activity now transacting via futures and options markets. This contrasts with earlier stages of the cycle, where spot trading dominated price movements.

On-chain data indicates that STHs—holders who have held their BTC for less than 155 days—are now holding at cost levels that are close to the current spot price. This suggests that the cost basis for recent BTC buyers has been largely absorbed by the market, reducing the likelihood of near-term selling pressure from this group. According to Lookonchain, STH breakeven prices have been within a 2% range of the current price over the past week. Such proximity to breakeven is often a precursor to price momentum, as it reduces the incentive for near-term profit-taking or panic selling.

Derivatives markets have also shown signs of overheating, with open interest (OI) in Bitcoin futures reaching record highs. Per data from CFTC filings, the total OI across major exchanges has surpassed $30 billion, with a significant portion attributed to leveraged positions. This level of capital deployed in derivatives indicates a high degree of market positioning, especially among speculative traders. When such positioning reaches extremes, it typically results in either a large liquidation event or a sharp continuation of the current trend. Analysts warn that a sudden move in price could trigger a cascading effect as leveraged positions are forced to close, potentially accelerating upward momentum.

Historically, Bitcoin has demonstrated a tendency to experience sharp price corrections or surges following the activation of large, long-dormant positions. Recent on-chain activity saw a notable movement of 80,000 BTC from an address that had been inactive for over 14 years. While the move initially caused short-term volatility, experts note that such activity is not necessarily bearish. Large transfers often occur via over-the-counter (OTC) channels, where market impact is minimized. Additionally, the address in question is believed to belong to an early participant rather than a potential dumping event.

Given these trends, the market is closely watching for any catalysts that could tip the balance toward a breakout move. Factors such as macroeconomic data, global central bank policy shifts, and developments in the U.S. banking sector are all seen as potential triggers. Meanwhile, key technical indicators such as the Bitcoin Ahr999 Index remain within neutral-to-bullish territory, with the index hovering just above 0.50—a level often associated with bear-market bottoms. This suggests that, while the market is not in a traditional bear-trap, it is still in a phase where volatility and uncertainty remain elevated.

The convergence of overheated derivatives, breakeven STH positions, and long-dormant address activity has led some analysts to draw comparisons with the 2024 cycle. If history repeats itself, the market could see a rapid repricing event driven by a combination of forced liquidations, renewed institutional participation, and retail-driven buying pressure. As the market remains in a state of high sensitivity to macroeconomic and on-chain signals, investors are advised to remain cautious and prepared for rapid shifts in momentum.