Bitcoin Traders Eye Key Resistance as Analyst Flags Fresh Short Setup

Analyst says shorts entered late face squeeze risk with $116.5K seen as max bounce zone before further downside.

A drop under $101.7K would break the “magic bull market line” and confirm a bearish market structure.

On-chain data shows short-term holders at loss near $112.5K, raising risk of more selling if declines continue.

Bitcoin is trading at $111,150 after a steep retreat from early October’s highs, with fresh attention turning to resistance and downside targets. Analyst maintains that the area between $115,000 and $125,000 marked a clear zone for building short positions since late August. He said his average entry is around $119,000 and price briefly touched $126,000 before the October drop. That move confirmed the broader weakness he had anticipated.

Short Liquidations and Upside Trap Risk

Recent positioning changes have added stress to late entrants. Doctor Profit noted that many traders opened shorts only after the breakdown, leading to liquidations near $116,500. He argued that his own entries are above those levels, making newer positions more vulnerable to a potential squeeze

He also pushed back on claims that heavy liquidations are between $120,000 and $130,000, stating that his data shows lower liquidity there. He attributed it to the fact that very few traders entered shorts during that price window in August and September.

However, he sees the possibility of a limited bounce. He assessed $116,500 as the maximum upside if price retraces, a move he views as an opportunity to add fresh shorts rather than a change in trend. His bearish outlook depends partly on broader sentiment, which he described as driven by excessive greed on both sides.

Bear Market Line and On-Chain Pressures

Doctor Profit noted $101,700 as a key support. A breakdown below that level, in his view, would push Bitcoin under what he called the “magic bull market line,” indicating a bearish market structure

He expects high volatility if price moves through that level. He also pointed to on-chain data showing the short term holder realized price at $112,500. Traders who bought at that average now face losses, and he said a further 5–10% decline could lead to additional selling pressure from those holders.

Another factor is the upcoming Consumer Price Index release on Friday, with expectations set at 0.3%. He flagged the event as a data point that could influence short term positioning.

Levels to Watch and Structural Signals

Price action shows a series of lower lows and lower highs, marking continued weakness. The zone around $115,000 to $117,500 remains a key resistance area and aligns with Doctor Profit’s stated short-entry region

The next major target is between $92,500 and $95,000, an area that previously served as support in September. Momentum under $105,000 could accelerate a move into that band. Volatility has tightened, with smaller candles indicating short-term indecision

A failure to reclaim $110,000 would align with ongoing bearish continuation. However, any sustained move above $117,500 could force short covering toward the $120,000 to $122,000 stretch, though analyst does not expect that scenario to extend further.

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