Bitcoin is entering Q3 on a cautious yet optimistic note, with the market closely watching whether the top cryptocurrency can push past the $110,000 level. After rebounding from its Q2 lows near $98,000, BTC now finds itself in a tight range, hovering between $106,000 and $108,000. The next move could come down to which side—bulls or bears—wins the leverage battle.

At the same time, on-chain and macro signals show that Bitcoin treasuries are expanding, and stablecoin inflows are hitting record highs, setting the stage for potentially explosive price action.

Bitcoin Recovers as Leverage Gets Flushed

BTC ended the second quarter with a decisive bounce after dipping below $100,000 earlier in June. That drop coincided with heightened geopolitical fears and bearish sentiment, but Bitcoin’s swift recovery wiped out many short positions and pushed the market into a reset.

Futures data shows that only 58% of long positions are now sitting in potential squeeze territory, a sharp decline from over 80% a week earlier. This drop signals a major deleveraging, often a precursor to renewed market momentum.

However, with the price now consolidating in the $106K–$108K range, short traders are returning. This has created a critical zone for market watchers: if Bitcoin fails to break out above $110,000, it could signal a bearish rejection and another correction. But if it clears the level decisively, the path to a new all-time high could open up quickly.

High-Stakes Leverage Bets in Play

One of the more notable positions attracting attention is from trader James Wynn, who has become known this cycle for placing large, high-leverage bets on Bitcoin. His latest position—a 40x short worth $1.49 million—is currently sitting just below a liquidation level of $108,630.

While it’s unclear whether Wynn is making a calculated call or repeating past errors, the position places him in a risky zone, especially if Bitcoin surges past $110K. If the price rises further, Wynn’s short—and others like it—could be liquidated, adding fuel to a potential breakout.

This dynamic between large leveraged shorts and key resistance levels is being watched closely, as it could trigger the kind of short squeeze that sends prices sharply higher in a short time.

Tether Liquidity Points to Bullish Underpinning

Meanwhile, stablecoin data is showing signs of renewed investor interest. Tether’s circulating supply has reached a record high of $158 billion. That means more liquidity is flowing into the crypto ecosystem—often a bullish signal for Bitcoin.

In past cycles, increases in stablecoin supply have often preceded price rallies. The logic is simple: more stablecoins usually mean more buying power sitting on exchanges, waiting for the right moment to enter the market.

In this case, Bitcoin’s slower, more methodical move upward suggests that smart money could be accumulating, rather than chasing prices. That theory gains more weight when considering reports that BlackRock is adding over $1 billion in BTC weekly to its growing crypto portfolio.

Bitcoin Treasuries Show Growing Confidence

Institutional sentiment remains a key driver in Bitcoin’s recent performance. In addition to BlackRock, companies such as Metaplanet and Bakkt have either expanded or signaled plans to grow their Bitcoin holdings. Metaplanet, a Japan-based treasury firm, recently purchased over 1,200 BTC, adding to its strategic reserve.

This trend of growing Bitcoin treasuries suggests that large entities are continuing to treat BTC as a long-term store of value. With each new purchase, the available supply on the open market shrinks—another structural factor that could support higher prices in the months ahead.

Short Squeeze Setup or Slow Burn?

As Q3 begins, Bitcoin’s price structure appears to be laying the groundwork for either a breakout or a pause. The 64% short skew in Binance derivatives, combined with heavy retail shorting and resistance pressure at $110K, forms the perfect setup for a classic volatility squeeze.

If bulls regain momentum and push BTC beyond $110,000, those short positions could be forced to close quickly, leading to sudden upward pressure. On the flip side, if Bitcoin gets rejected again at this level, it could lead to a pullback and another round of market-wide uncertainty.

But for now, fundamentals remain supportive. Liquidity is increasing. Institutional demand appears steady. And the broader market is showing signs of strength, rather than froth. That gives Bitcoin a solid foundation heading into a potentially pivotal quarter.

Conclusion

With Q3 underway, Bitcoin sits at a crucial technical and psychological juncture. Treasuries are growing, stablecoin liquidity is rising, and institutions continue to accumulate. Meanwhile, leveraged shorts are lining up in a narrowing price range, setting the stage for a possible breakout or a sudden reversal.

As market volatility picks up, traders will be watching $110K as the key level to determine whether Bitcoin’s next big move is up—or down.