Bitcoin once again plays out an intense drama of 'bull vs bear' - after starting a rebound on Sunday night, this leading cryptocurrency continued to rise on Monday, briefly breaking through the 116,000 dollar mark, directly triggering a massive wave of short liquidations. According to data, this increase caused a total of 174 million dollars in Bitcoin short positions to be forcibly liquidated, with Binance, one of the world's largest exchanges, becoming the 'disaster area' where short traders suffered the most losses.
1. The 116,000 threshold becomes the 'bear squeeze line': 174 million behind the market context.
This wave of Bitcoin's rebound has broken the market's general expectation of a "further decline." On Sunday evening, BTC initiated a rebound, briefly rising to 116,032 dollars during Monday's trading, and then slightly pulling back to oscillate around 115,800 dollars — but it was this wave of "breaking ten thousand" rise that became the "strangulation line" for short positions.
According to CoinGlass data, when Bitcoin broke through 116,000 dollars, an additional 19.15 million dollars in shorts were liquidated in a single round; since the rebound began, the cumulative liquidation amount has reached 174 million dollars. Among them, Binance contributed the largest scale of short liquidation, as many short traders who opened positions on that platform were forced to close their positions due to price breaking through their expected stop-loss levels, resulting in significant losses.
From a market structure perspective, this liquidation has long had its "premonitions": Before the rebound started, Bitcoin's open interest rose from a low of 33 billion dollars to over 36 billion dollars, and among the newly added open interest, about 40% were short positions — the high concentration of shorts makes it easy for even a slight price increase to trigger a "chain liquidation," creating a "short squeeze" effect.
It is worth noting that this rise is also accompanied by an increase in Bitcoin's dominance: Currently, BTC's dominance in the entire crypto market has expanded to 57.7%. Although the market has not clearly entered the "BTC season" (a market where Bitcoin leads alone), this data highlights the preference for "crypto pegged assets" and provides support for this rebound.
2. Market details: liquidity gaps, whale movements, and volatility risks
The wave of liquidations triggered by this Bitcoin rise also conceals several key market details that could affect the future trend:
1. The distribution of liquidity intensifies price volatility
Currently, Bitcoin's liquidity shows "polarization": Near the 120,000 dollar mark, liquidity is extremely thin — this means that if prices continue to rise, it may struggle to stabilize due to insufficient buying; while below, in the 112,500-113,000 dollar range, there is a concentration of liquidity from a large number of new long positions. Market analysis indicates that if there is a significant selling pressure later, it may trigger the liquidation of longs in this range, leading to a price drop to a lower range.
2. Whale movements conceal differences
On the derivatives platform Hyperliquid, the operations of market "whales" (whale investors) show clear divergence: some core whales still hold long positions after this rebound and remain in profit; however, there are also well-known traders who choose to open short positions against the trend — for example, the notorious trader James Wynn has opened a relatively small Bitcoin short position from his main account, setting a liquidation price of 117,470 dollars, suggesting that he believes the current price of 116,000 dollars is close to a short-term top.
3. Volatility risks climb to six-month highs
The Bitcoin volatility index (an indicator reflecting price volatility) has continued to rise recently, reaching 1.97%, the highest point in nearly six months. This data indicates that although this rebound has temporarily suppressed the bears, overall market uncertainty is still increasing, and the risks faced by short positions have not been completely eliminated. Subsequent prices may still experience violent fluctuations.
3. Can the October market "turn from weak to strong"? Bitcoin still faces two major tests
From a monthly performance perspective, Bitcoin's October market can be described as "first suppressed, then lifted": At the beginning of the month, influenced by market panic, BTC faced significant downward pressure, almost becoming "one of the worst-performing Octobers in recent years"; however, with this rebound, its net gain for October has risen to 1.21%, barely reversing the decline.
However, Bitcoin still needs to face two major tests, which will directly determine its final performance in October:
Monthly options expiration pressure: At the end of October, Bitcoin will face monthly options expiration, with a large amount of out-of-the-money and in-the-money options being exercised and closed, which may trigger short-term capital movements and intensify price fluctuations.
Uncertainty in the new weekly trading cycle: Whether this rebound can continue needs to be observed through the flow of funds in the new week — if buying pressure does not continue, or if profit-taking sentiment among bulls intensifies, prices are likely to return to the oscillation range.
It is worth mentioning that historical data shows that Bitcoin usually performs steadily in October, but this year's abnormal volatility has broken this pattern. Previously, BTC had briefly surged to the 130,000 dollar mark, but after a wave of small short squeezes, it failed to hold that level and ultimately retreated — this also casts a shadow over the current rebound: the market's cautious sentiment towards "buying high" may limit the upward space.
4. Core question: Can Bitcoin's rebound continue?
The rebound triggered by the liquidation of 174 million in shorts has refocused the market on a key question: Can the Bitcoin uptrend continue? Currently, market opinions are showing significant divergence:
1. "End of Rebound Theory": The current cycle is nearing its end
Some analysts believe that Bitcoin's trading cycle is nearing its end — from the derivatives market perspective, high-value speculative bets are still ongoing, but the growth of open interest has shown weakness; additionally, the price near 116,000 dollars has touched a short-term resistance level, and if it cannot break through the thin liquidity area at 120,000 dollars, a correction is likely to begin.
2. "Year-end new high theory": Long-term upward logic remains intact
Another group of market participants is optimistic that Bitcoin will reach a new high before the end of the year — they believe that the overall liquidity environment in the crypto market has not yet tightened, and the long-term benefits of Bitcoin's halving cycle are still present. Although short-term volatility is severe, there has not been a similar 70% deep correction as seen in previous halving periods, indicating strong market resilience, and there is still potential for upward movement.
3. "Range Oscillation Theory": Balance between bulls and bears becomes mainstream
Another neutral view suggests that Bitcoin will enter a sustained range trading cycle: the upper 120,000 dollars is a strong resistance, while the lower 112,500-113,000 dollars is a key support, making it difficult to break through this range in the short term. Both bulls and bears will repeatedly battle in this range until new catalysts (such as macro policy changes, large capital movements) break the balance.
5. Investor warning: Risks and opportunities under increasing volatility
For ordinary investors, this Bitcoin market releases a clear signal: The current market has entered the "high volatility, high risk" stage, and two major risks need to be heeded:
Chasing highs and cutting losses risk: The liquidation of 174 million in shorts has already proven that short-term price fluctuations can easily trigger extreme market conditions; blindly chasing highs or opening shorts against the trend could become "the objects of being harvested".
Liquidity trap risk: The liquidity gap near 120,000 dollars may lead to "violent price swings"; investors should avoid setting stop-loss orders or opening positions at price levels lacking liquidity.
To seize the opportunity of this market, it is advisable to closely monitor two key indicators: first, the changes in Bitcoin's open interest — if open interest continues to decline, it may indicate that market sentiment is cooling and the rebound momentum is weakening; second, the positions of whales on platforms like Hyperliquid — as a "weather vane" for the market, the switching of whales between long and short positions often reflects market trends in advance.
In summary, Bitcoin's rebound at the 116,000 dollar mark is both a "strangulation" of the shorts and a warning bell for market risks. At a time when the volatility index is at a six-month high, rationally viewing the market and controlling position risks are far more important than chasing short-term gains.
