Bitcoin Faces Potential Long Squeeze as Retail Investors Flee — What Lies Ahead
Bitcoin’s recent price fluctuations have triggered a wave of concern among short-term investors, many of whom are rapidly exiting their positions. Despite this panic selling, there are signs suggesting that the market may be nearing a critical turning point — possibly setting the stage for a bullish reversal.
In early November, Bitcoin’s price briefly dipped below the psychologically significant $100,000 threshold, bottoming out near $98,900 before quickly recovering. This downward movement sparked fears of a prolonged bearish trend, particularly among retail traders. However, on-chain data paints a more nuanced picture of the current market dynamics.
A recent analysis by on-chain expert Amr Taha, published via CryptoQuant’s QuickTake platform, highlights a notable shift in Bitcoin trading activity on Binance. Taha focused on a specific metric — the “LTH/STH Buy/Sell Binance” indicator — which tracks buying and selling behavior on the exchange, distinguishing between long-term holders (LTHs) and short-term holders (STHs).
Taha’s findings reveal that on November 3rd and 5th, there was a marked increase in BTC inflows to Binance from STHs. On the 3rd, approximately 251 BTC was deposited, followed by an even larger amount of 517 BTC just two days later. These inflows were largely attributed to wallets typically associated with impulsive behavior in the market — sometimes referred to as “clown wallets.”
Short-term holders are known for their tendency to react emotionally to market volatility, often selling off their assets during downturns. This panic selling can create ample liquidity for long-term investors, who view such corrections as opportunities to accumulate Bitcoin at discounted prices.
Another key metric supporting this interpretation is the BTC: Binance Liquidation Delta, which measures the net difference between long and short position liquidations. According to Taha, the majority of recent forced liquidations involved long positions — positions that were likely opened late in the cycle and with excessive leverage. These liquidations primarily occurred within the $107,000 to $100,500 range, triggering a long squeeze.
A long squeeze happens when overleveraged long positions are liquidated en masse, leading to a sharp price decline. While this can create short-term turbulence in the market, long-term holders are typically unfazed, often seizing the moment to expand their positions. History suggests that such events can precede major price bottoms, potentially ushering in a period of consolidation and upward momentum.
At the moment, Bitcoin is trading around $103,500, having rebounded by over 2% in the last 24 hours. This modest recovery hints at the resilience of the asset, even amid heightened volatility.
Adding to the complex market landscape is the behavior of institutional players and miners. Recent reports indicate that Bitcoin miners are entering “survival mode” due to a collapse in hashprice, the revenue they earn per unit of computing power. This downturn in miner profitability could lead to further selling pressure if miners are forced to liquidate their holdings to cover operational costs.
Meanwhile, some institutional holders are also making strategic decisions. Spain’s national science institute, for instance, has revealed plans to liquidate Bitcoin holdings that have remained untouched for over a decade. These types of sales can momentarily add to bearish pressure but are often absorbed quickly by the broader market due to Bitcoin’s growing liquidity.
Despite these challenges, long-term fundamentals remain robust. Bitcoin’s halving event, anticipated in the coming months, is expected to reduce the rate at which new coins enter circulation — a historical catalyst for price appreciation. Combined with growing institutional interest and the potential approval of Bitcoin ETFs in major markets, these factors could fuel the next bullish phase.
It’s also worth noting that retail panic can sometimes be a contrarian indicator. When the majority of short-term holders are exiting the market in fear, seasoned investors often interpret this as a sign that the bottom is near. The more emotional the sell-off, the more likely it is that a reversal is on the horizon.
Another factor to consider is the macroeconomic environment. Inflation concerns, interest rate decisions, and geopolitical tensions continue to influence risk appetite across financial markets. Bitcoin, often viewed as a hedge against traditional financial instability, may benefit from such uncertainty — especially if central banks return to more accommodative policies.
Looking ahead, investors should monitor on-chain metrics closely, especially those relating to exchange inflows, miner activity, and liquidation patterns. These indicators can offer valuable insights into where Bitcoin is headed next.
In conclusion, while the recent sell-off and long squeeze have rattled short-term traders, the broader picture suggests a potential bottoming out. Long-term holders remain confident, using dips as buying opportunities. If historical patterns hold, Bitcoin may be on the cusp of a recovery — one that could lead to renewed bullish momentum in the months ahead.