Long squeeze alert: Is Bitcoin about to wreck the crowd?

As trends in the cryptocurrency market begin to move more into the green zone, Bitcoin (BTC) is facing a critical moment where long positions continue to pile up while open interest climbs at a key resistance level, exposing traders to a potential long squeeze.

Specifically, the flagship decentralized finance (DeFi) asset is facing a critical resistance wall near $117,500, where bullish sentiment is still strong, but over-leveraged longs are forced to exit, accelerating downward pressure, according to the analysis by crypto expert Ali Martinez on September 17.

Indeed, both open interest and net longs have spiked recently, suggesting traders are betting on a breakout above resistance. Usually, rising open interest suggests stronger participation in the market. But when this happens near a historically significant resistance wall, it also increases the risk of a rapid unwinding if BTC fails to break higher.

As it happens, Bitcoin has tested the $117,500 level multiple times without confirmation, making it a crucial battleground between bulls and bears. A clean breakout could open the path to new highs, but failure here may trigger liquidations that cascade into a sharper correction.

A test of conviction for Bitcoin bulls

If a squeeze does occur, the price might drop toward $114,800 – $115,000 as leveraged longs leave the market. However, such shakeouts are often short-lived and can provide stronger foundations for a sustained move higher after clearing the excess leverage.

At the same time, fellow crypto analyst Michaël van de Poppe has noted that Bitcoin attacking the range resistance ahead of the upcoming Federal Open Market Committee (FOMC) meeting “could be a great sign,” as “quite usually it’s just a run before a drop.”

At press time, the crypto market’s founding asset was changing hands at the price of $116,348.23, indicating a 0.79% growth in the last 24 hours, an advance of 3.57% across the previous seven days, and an accumulated increase of 1% on its monthly chart.

For now, all eyes remain on $117,500. A decisive daily close above this level would likely invalidate near-term squeeze risks and add weight to the bullish case for another leg higher. Until then, traders may need to stay on their toes, especially those relying on heavy leverage.