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The next 24 hours could be pivotal for the crypto market.
And the market already seems to be positioning for more downside, with traders leaning bearish on Bitcoin. According to Lookonchain data, four Bitcoin traders have opened a combined short position of 5,379 BTC, worth around $343 million, with liquidation levels between $64k-$66k. This suggests perp traders are expecting strong resistance around $66k, making this a key level to watch given the current setup.
From the technical lens, Bitcoin has been chopping around $65k for over seven weeks now. Notably, this marks BTC’s strongest weekly consolidation since Q4 2025. However, with ETF flows still strong, a heavily crowded shorts could set up the conditions for a squeeze if BTC breaks above resistance.
However, a few key pointers need to be considered.
To begin with, whales are also betting against Bitcoin, with their positioning adding to the broader bearish sentiment. And when we look at a key BTC metric, this positioning doesn’t look entirely random. According to Glassnode, Bitcoin hasn’t hit key bottom levels yet, which suggests that while selling pressure is cooling off, it hasn’t reached the “extreme” exhaustion levels seen during previous BTC bear markets.
In this context, rising BTC short positioning around the current range could be a strategic bet rather than a random move. The key takeaway? This positioning also lines up with the upcoming CPI report, making the next 24 hours particularly important for Bitcoin.
Bitcoin bear trap brewing?
The market is clearly split 50-50 on the rate outlook.
According to FedWatch data, markets are pricing in a 49.9% chance of a rate hike and a 50.1% chance of a rate cut at the upcoming FOMC meeting. In this setup, the July CPI, due on the 12th of August, could become a key catalyst for risk assets, with Bitcoin likely at the center of the reaction. This becomes even more important as capital is already flowing into gold. So, if inflation comes in “hotter-than-expected” that flow could intensify further.
However, market analysts are still leaning toward a more dovish stance, especially if the upcoming CPI print comes in soft. Banks are already pricing in a relatively “benign” inflation reading after June’s softer-than-expected print, which could strengthen the case for rate cuts and provide some relief for risk assets.
If that happens, Bitcoin’s weak spot demand could quickly flip. In this context, the rising shorts could become a high-risk trade, with the $343 million mentioned above facing liquidation if BTC breaks above $66k.
And based on the ongoing market pricing and the expectations around the CPI report, a breakout above resistance doesn’t look unlikely. With Bitcoin shorts building across the board, the next 24 hours could be highly consequential, potentially setting up one of the biggest bear traps of the cycle.
Final Summary
- Bitcoin shorts are piling up ahead of CPI, with $343 million at risk if BTC breaks above $66k.
- A soft CPI push could push BTC higher, triggering a potential bear trap.
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