Bitcoin Set For Short Squeeze Before Long Trap In October
A carefully watched derivatives strategist expects Bitcoin’s subsequent main transfer to start with a violent quick squeeze, solely to flip right into a punishing “lengthy lure” as October opens—a sequence he argues rhymes extra with late-2023 than with the euphoric blow-offs of March and December 2024.
In a thread posted on September 12 and expanded over the weekend, analyst Nik Patel (@cointradernik) stated the present positioning backdrop “is much less like March and Dec ’24 crossovers and extra like Dec ’23,” warning that the market is ready up for a “multi-week whipsaw going into early/mid Oct.” He added a selected liquidation map: “Give me $1.5bn in shorts liqs on the weekly after which $2.8bn of lengthy liqs into Oct seventh pls.”
— Nik (@cointradernik) September 12, 2025
What Is Different This Time For Bitcoin?
What makes this setup totally different, in his view, is the stability between spot and derivatives flows and the breadth of foundation trades. “Spot vol as % of complete vol [is] decrease right here than prior crossovers for Others OI vs BTC OI (March ’24 and Dec ’24),” he wrote, arguing that if spot demand had been actually within the driver’s seat “we should always anticipate spot vol as a % of complete vol to be larger not decrease.”
Instead, he sees “a mixture of foundation commerce throughout a broader vary of markets than simply BTC & ETH but in addition extra directional levered shorts than prior events,” with the fast “upside threat… even better for a brief liq cascade first.” Funding, he famous, is “benign” relative to these earlier peaks.
Real-time funding knowledge broadly corroborate the “benign” characterization. Across main venues, BTC perpetual funding hovered near flat in current classes—typically within the +0.005% to +0.01% per-8-hour vary—properly beneath the overheated prints typical of euphoric tops. That retains the door open to a squeeze with out the necessity to first unwind excessive lengthy leverage.
Sentiment, Nik argued, remains to be nearer to “disbelief” than euphoria. He contrasted March 2024’s ETF frenzy and December 2024’s post-election optimism with right now’s extra skeptical tone, pointing to a still-elevated pool of sidelined capital. “Both prior crossovers had stablecoin dominance trough at 5% ish. We are presently at 6.1% — imo that is textbook disbelief/Sidelined September positioning,” he wrote.
In his base case, that struggle chest finally fuels year-end risk-taking as soon as the whipsaw performs out: “We will virtually actually get the positioning whipsaw and bear lure throughout that quarterly finish & month-to-month open window of weak spot, however there are much more stables able to be deployed right here into year-end.”
In a self-aware apart, Nik even shared a machine-generated distillation of his view: “ChatGPT coming to the same conclusion right here after I fed all these charts in, idk if that evokes confidence or concern about my view although lol.”
ChatGPT wrote: “Past crossovers: signaled end-phase altseason blowoffs, fueled by euphoric longs with no dry powder left. This crossover: alerts pre-phase potential — leverage is already there, but it surely’s balanced/shorter, with capital nonetheless on the sidelines (stables). This is why the funding differential is so vital: • High funding + low stables = top-like circumstances. Low funding + high stables = squeeze-ready circumstances.”
Renowned crypto analyst CRG (@MacroCRG) consented: “Agree with him {that a} large quick liq occasion is probably going earlier than an enormous lengthy liq occasion nonetheless plenty of positioning to unwind imo from ppl anticipating a bearish September. In saying that, would love the cash to bounce quickly, many are at/close to key pivots.”
As ever with path-dependent derivatives tape, the set off issues. Nik cautioned {that a} “large quick liquidation occasion” within the coming week might flip the script if it invitations “late longs” and spikes funding into October. But absent that sudden shift, his base case stays a two-step: an upside liquidation cascade that resets shorts, adopted by a rug-pull on over-eager longs into the October 7 window.
Traders awaiting affirmation will deal with whether or not funding stays contained as value lifts, whether or not spot participation truly broadens quite than fades, and whether or not stablecoin deployment reduces the money cushion he cites.
At press time, Bitcoin traded at $114,852.
