Market Makers Spring the Trap: Bitcoin Short Squeeze Could Catapult Price Beyond $123,000

Brace for impact—Bitcoin's coiled spring is about to snap. A perfect storm of market maker maneuvers and trapped shorts could send prices rocketing past $123,000.

The Setup: Liquidity Hunters Circle

Whales are painting the tape, luring bears into a classic trap. Those betting against BTC are about to learn why Wall Street calls crypto 'the honey badger of assets'—it doesn't care about your stop losses.

The Trigger: Dominoes in Motion

One big buy order could cascade through exchanges faster than a hedge fund liquidating its yacht portfolio. When the squeeze comes, it won't be a rally—it'll be a vertical assault on all-time highs.

The Aftermath: New Rules Apply

At these altitudes, even 'conservative' crypto predictions sound like lottery tickets. Just remember—when the music stops, someone always ends up holding the bag (probably the guy who FOMO'd in at $122,999).

Bitcoin Shows Tendency To Cross $123,000 Again

In an X post, Luca pointed to the Bitcoin market makers as the ones behind the recent price movements and that there was a reason for this. The initial move downward looked to be an attempt to flush out late longs as crypto traders tried to take advantage of the frenzy created by the new all-time highs.

Then a reversal moved into the works, catching shorters unaware and sweeping liquidity at support levels. This comes as bears were pulled into a false sense of security, believing that the price WOULD continue to decline before being hit with the move back up above $118,000, triggering hundreds of millions of dollars in liquidations.

All of this is happening at a time when things like the bitcoin funding rate were falling. Coinglass data shows the Bitcoin OI-Weighted Funding Rate had fallen briefly below 0.01% on Sunday after reaching as high as 0.0167% earlier in the week on July 23. Luca further revealed that the Bitcoin Premium metric had also fallen back into the negative.

Another interesting fact was the fact that the open interest had shot up when the Bitcoin price had declined. Then, once the price began to recover, the open interest began to rise once again, and Luca interprets this as short positions starting to get squeezed. If this squeeze continues, then the Bitcoin price could spike very quickly, taking out tens of thousands of short positions with it.

BTC Open Interest Tells A Story Of Exposure

As the bitcoin price has bounced between $115,000 and $120,000, the BTC open interest has barreled upwards in response. In fact, this metric sits at all-time high levels, shaking off the market uncertainty as crypto traders continue to open positions to bet on Bitcoin’s next move.

The open interest had touched $87.89 billion back on July 15, and since then, it has averaged above $80 billion every day. Amid this, the Binance Long/Short ratio shows that shorters are currently dominating at 53.97% compared to 46.03% for long accounts. This lends credence to Luca’s expectations that the market could see a short squeeze to take out shorters and push the price to new all-time highs.