A closely watched derivatives strategist expects Bitcoin’s next major move to begin with a violent short squeeze, only to flip into a punishing “long trap” as October opens—a sequence he argues rhymes more with late-2023 than with the euphoric blow-offs of March and December 2024.
In a thread posted on September 12 and expanded over the weekend, analyst Nik Patel (@cointradernik) said the current positioning backdrop “is less like March and Dec ’24 crossovers and more like Dec ’23,” warning that the market is set up for a “multi-week whipsaw going into early/mid Oct.” He added a specific liquidation map: “Give me $1.5bn in shorts liqs on the weekly and then $2.8bn of long liqs into Oct 7th pls.”
pic.twitter.com/LVsY4bU99o
— Nik (@cointradernik) September 12, 2025
What Is Different This Time For Bitcoin?
What makes this setup different, in his view, is the balance between spot and derivatives flows and the breadth of basis trades. “Spot vol as % of total vol [is] lower here than prior crossovers for Others OI vs BTC OI (March ’24 and Dec ’24),” he wrote, arguing that if spot demand were truly in the driver’s seat “we should expect spot vol as a % of total vol to be higher not lower.”
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Instead, he sees “a combination of basis trade across a broader range of markets than just BTC & ETH but also more directional levered shorts than prior occasions,” with the immediate “upside risk… even greater for a short liq cascade first.” Funding, he noted, is “benign” relative to those earlier peaks.
Real-time funding data broadly corroborate the “benign” characterization. Across major venues, BTC perpetual funding hovered close to flat in recent sessions—generally in the +0.005% to +0.01% per-8-hour range—well below the overheated prints typical of euphoric tops. That keeps the door open to a squeeze without the need to first unwind extreme long leverage.
Sentiment, Nik argued, is still closer to “disbelief” than euphoria. He contrasted March 2024’s ETF frenzy and December 2024’s post-election optimism with today’s more skeptical tone, pointing to a still-elevated pool of sidelined capital. “Both prior crossovers had stablecoin dominance trough at 5% ish. We are currently at 6.1% — imo this is textbook disbelief/Sidelined September positioning,” he wrote.
In his base case, that war chest ultimately fuels year-end risk-taking once the whipsaw plays out: “We will almost certainly get the positioning whipsaw and bear trap during that quarterly end & monthly open window of weakness, but there are a lot more stables ready to be deployed here into year-end.”
In a self-aware aside, Nik even shared a machine-generated distillation of his view: “ChatGPT coming to a similar conclusion here after I fed all these charts in, idk if that inspires confidence or concern about my view though lol.”
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ChatGPT wrote: “Past crossovers: signaled end-phase altseason blowoffs, fueled by euphoric longs with no dry powder left. This crossover: signals pre-phase potential — leverage is already there, but it’s balanced/shorter, with capital still on the sidelines (stables). This is why the funding differential is so important: • High funding + low stables = top-like conditions. Low funding + high stables = squeeze-ready conditions.”
Renowned crypto analyst CRG (@MacroCRG) consented: “Agree with him that a big short liq event is likely before a big long liq event still lots of positioning to unwind imo from ppl expecting a bearish September. In saying that, would like the coins to bounce soon, many are at/near key pivots.”
As ever with path-dependent derivatives tape, the trigger matters. Nik cautioned that a “massive short liquidation event” in the coming week could flip the script if it invites “late longs” and spikes funding into October. But absent that sudden shift, his base case remains a two-step: an upside liquidation cascade that resets shorts, followed by a rug-pull on over-eager longs into the October 7 window.
Traders watching for confirmation will focus on whether funding stays contained as price lifts, whether spot participation actually broadens rather than fades, and whether stablecoin deployment reduces the cash cushion he cites.
At press time, Bitcoin traded at $114,852.
Featured image created with DALL.E, chart from TradingView.com
