Bitcoin’s rally may trigger a short squeeze near $114K before forming a local top.
On-chain data shows strong demand, but a long-term correction could begin by late 2025.
Bitcoin’s [BTC] explosive push higher is catching bears off guard, with a sharp rise in short positions. This is laying the groundwork for a potential wave of liquidations around the $113K-$114K level.
It could trigger a brief blow-off top, but deeper signals suggest something more structural. On-chain data points to resilient capital inflows and bullish conviction through October.
The short-term rally may soon be over, but the broader market could be preparing for a slow transition into a longer-term correction phase.
Why the $113K-$114K zone could trigger a blow-off top
Bitcoin’s recent rally is being powered by a swelling pool of short positions. A large cluster of short liquidations is concentrated at the $113K and $114K levels; precisely where price is now inching toward.
Source: Alphractal
This buildup of leveraged bets against BTC creates conditions for a classic short squeeze: as price approaches these levels, liquidations could accelerate buying pressure and push BTC even higher.
But with so much Open Interest stacked here, this surge may mark a short-term local top.
Market still supported by demand
Despite price volatility and mounting leverage, Bitcoin’s on-chain structure remains firm.
Source: Alphractal
The realized cap impulse has consistently respected its mid-baseline and decision zone, showing strong demand.
Historically, price has only turned structurally bearish when this metric dipped into lower support territory. As of now, it continues to show accumulation behavior, not distribution.
With realized value still trending upward, the data supports the case that current price moves are not speculative blow-offs, but rather backed by real capital rotation.
This reinforces the likelihood of price strength persisting through the next few months; at least until Q4.
Bitcoin: The clock’s ticking
While the short-term picture looks bullish, the long-term realized cap impulse offers a cautionary backdrop. This metric is approaching historical resistance zones that have previously preceded multi-month downtrends.
Source: Alphractal
We may be witnessing the final leg of capital inflow strength before a cyclical transition.
Their outlook suggests that once this impulse peaks — likely around October — Bitcoin could enter a bearish phase lasting up to a year, stretching into late 2026.
Next: Bitcoin sellers cash out $1.5B in profits – Is this the start of a deeper correction?
