Bitcoin Short Squeeze: $5 Bln Shorts at Risk If BTC Hits $113K

  • $5B+ in shorts may get liquidated if BTC touches $113K

  • Short positions surged even as BTC nears new highs

  • Short squeeze possibility could accelerate price rallies

Bitcoin is trading close to the $110,000 mark, and traders are starting to worry. Short positions have significantly increased, with billions of dollars now at risk. If Bitcoin’s price hits $113,000, analysts say that over $5 billion worth of these short bets could be wiped out.

This potential for a massive Bitcoin short squeeze is growing as the market heats up. A short squeeze happens when traders betting against Bitcoin (shorts) are forced to buy back the asset as prices rise—further driving up the price. It’s a rapid, high-volatility event that can push Bitcoin to unexpected highs.

Recent market behavior shows a steady rise in open interest—money committed to futures contracts—and mostly positive funding rates, meaning more traders are betting on the price going up. This imbalance increases the chance of a dramatic short squeeze.

How a Bitcoin Short Squeeze Happens

  1. Price breaks resistance: If BTC surpasses $113K, key technical levels get broken.

  2. Short liquidations trigger buys: Liquidated short positions turn into market buy orders, pushing prices higher.

  3. Momentum builds fast: Other traders jump in, creating a loop of rising prices and more liquidations.

Such squeezes aren’t uncommon in crypto markets. The current conditions—high leverage, growing shorts, and rising spot interest—make this scenario increasingly likely.

INSIGHT: If Bitcoin hits $113K, over $5 billion in short positions could be liquidated. pic.twitter.com/4Iwnujbbxg

— Cointelegraph (@Cointelegraph) July 4, 2025

Key Signals to Watch

IndicatorWhat It ShowsOpen interestIndicates market positioningFunding ratesReveal trader bias (long or short)BTC price levelsCritical resistance at $113K+

If the market breaks through $113K, Bitcoin could quickly shoot toward $115K or even $120K as forced buying adds to bullish momentum. However, traders should remain cautious—these moves often come with sharp reversals.

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