BTC Selloff Sets Stage for Short Squeeze

Bitcoin is undergoing a coordinated selloff from ETFs, short-term holders, and miners, draining spot liquidity at a pace not seen since the Terra collapse. BTC has dropped 12% in the past week, but this aggressive distribution is creating an unusually short-heavy market structure. Historically, such setups precede rapid reversals as short positions become vulnerable to squeezes. While near-term pressure remains, the extreme positioning suggests a potential sharp rebound if any catalyst triggers covering. Traders should monitor open interest and funding rates for confirmation of a reversal.

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