Bitcoin [BTC] is once again walking a tightrope as massive leveraged short positions emerge just days after the crypto market’s brutal $19 billion liquidation. With sentiment still shaky and geopolitical tensions resurfacing, BTC’s $110K support line is facing a critical test that could decide the next leg of the market’s trajectory.
The crypto market has yet to fully recover from last week’s liquidation cascade, which erased billions in open interest and sent shockwaves across exchanges. Despite attempts at recovery, BTC’s spot demand remains notably weak — an indication that retail and institutional buyers alike are still hesitant to re-enter.
At the time of writing, Bitcoin is down over 3% on the week, slipping from the $115K zone and failing to flip it into a new support level. The range breakdown has reinforced bearish sentiment, with analysts warning that $110K — once seen as a strong base — might not hold if selling pressure intensifies.
Adding to the market’s anxiety is the macro backdrop. Former U.S. President Donald Trump’s latest comments about an escalating trade war with China have rattled investor confidence.
Speaking at an economic forum earlier this week, Trump confirmed that the U.S.–China trade war remains “fully in motion,” signaling that the 100% tariffs slated for November 1st are still on track. His remarks reinforced fears that renewed trade tensions could destabilize global markets and push investors toward safer assets — a short-term bearish signal for Bitcoin.
“Macro chop is far from priced in,” Trump said, suggesting that the ongoing tariffs are just the beginning of a larger geopolitical standoff.
In response, Bitcoin briefly spiked 0.68% intraday but quickly lost momentum, indicating that traders were unwilling to take on new risk amid uncertainty. The broader market sentiment remains fragile, with volatility expected to rise in the days ahead.
While retail traders stay on the sidelines, institutional whales appear to be positioning for further downside. On-chain data revealed a staggering $600 million in new short positions placed across major exchanges — including $194 million on Bitcoin at 10x leverage.
What’s particularly alarming is the timing: the shorts went live less than two hours before Trump’s trade war announcement, leading to widespread speculation that some traders anticipated the news.
A similar pattern occurred a week ago, when a $420 million short at $121K preceded Bitcoin’s sharp drop and the ensuing $19 billion liquidation. That trade reportedly delivered huge profits for its initiators, further fueling theories that “smart money” might have insider visibility into key market events.
According to data from CryptoQuant, overall market leverage remains dangerously elevated. Traders continue to deploy high leverage across BTC and ETH pairs, increasing the risk of another cascade if prices drop below key support zones.
The $110K level now represents a psychological and technical battleground. A clean break below could trigger a chain reaction of liquidations, sending BTC as low as $105K before buyers step back in.
However, if bulls manage to defend this range, Bitcoin could stage a short-term rebound toward $117K–$118K, as short-sellers rush to cover their positions.
Technical analysts remain split on whether the recent pullback is a healthy correction or the beginning of a deeper retracement.
Crypto trader Titan noted that “BTC’s structure is weakening — we’re seeing lower highs and a loss of momentum on the 4-hour chart.” He added that sustained trading below $112K would likely confirm a short-term bearish reversal.
Meanwhile, bullish traders argue that the market is undergoing a typical “leverage reset” and that the long-term trend remains intact. On-chain indicators like active addresses and long-term holder accumulation suggest that whales continue to view the $110K region as a long-term value zone.
Beyond the crypto-native metrics, global market conditions continue to shape Bitcoin’s outlook. The U.S. dollar index (DXY) has been strengthening amid renewed trade tensions, while equities remain under pressure due to rising yields and slowing global growth forecasts.
Historically, Bitcoin has struggled to gain momentum during periods of macro tightening, as capital flows into safer, dollar-denominated assets. However, any sign of easing — whether from policy shifts or improving trade relations — could quickly flip sentiment in BTC’s favor.
The coming week could prove pivotal. If Bitcoin fails to hold above $110K, traders expect an acceleration toward $105K–$107K, where liquidity clusters suggest heavy buying interest. Conversely, a bounce above $115K would likely invalidate the bearish setup and reset market confidence.
For now, the $600 million short position serves as a stark reminder that Bitcoin remains a high-stakes asset where institutional moves can quickly reshape the entire landscape.
Until leverage normalizes and macro uncertainty fades, BTC’s $110K line will remain the most-watched level in the market — and possibly, its final defense before another round of volatility.
Steven is an explorer by heart – both in the physical and the digital realm. A traveler, Steven continues to visit new places throughout the year in the physical world, while in the digital realm has been instrumental in a number of Kickstarter projects. Technology attracts Steven and through his business acumen has gained financial profits as well as fame in his business niche. Send a tip to: 0x75395Ea9a42d2742E8d0C798068DeF3590C5Faa5
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