Bitcoin is coiling above the $110,000 mark and traders are split: is this the calm before a breakout or the setup for another fakeout? A rare mix of a Bollinger Bands squeeze, talk of a widening megaphone structure, and an aggressive 40x leveraged whale long has set the stage for a sharp move. With spot momentum muted and positioning turning mildly long, the next decisive candle could set the tone for weeks.

What’s happening on the chart

Bollinger Bands are narrowing, signaling volatility compression that often precedes large directional moves. On the flip side, traders flagged a possible megaphone pattern (expanding highs and lows), notorious for violent swings and failed breakouts. One more caution light: RSI sitting below 50 while price hovers under a key support/resistance flip suggests momentum hasn’t reclaimed dominance yet. Meanwhile, derivatives data shows longs near 55% and a whale reportedly opened a 40x BTC long—fuel for either a trend ignition or a liquidation cascade.

Why this matters to traders

- A squeeze into skewed positioning can create runaway moves once liquidity pockets are triggered. - Megaphone structures amplify risk: wider swings, more traps, deeper wicks. - Levered longs increase the odds of liquidation cascades—both as momentum fuel and as reversal risk if the move flips.

Actionable game plan

• Wait for confirmation: Look for a strong 4H/1D close outside the Bollinger Bands followed by a shallow retest that holds. Avoid guessing the direction inside the squeeze.
• Define the pivot: Treat $110,000 as a psychological pivot. Require structure confirmation (HH/HL or LL/LH) around that area instead of trading the first wick through it.
• Position sizing: Cut leverage and size down until volatility expands and direction is clear. In a megaphone, smaller size > tighter stops.
• Invalidation first: Place stops beyond the most recent swing that defines your thesis; don’t anchor to round numbers alone.
• Monitor BB width and RSI: A rising BB width plus RSI reclaiming 50 strengthens trend continuation after breakout.
• Watch derivatives tells: Track funding, open interest, and liquidation heatmaps. A breakout with rising OI and neutral funding is healthier than a squeeze with euphoric funding.
• Consider neutrality: If you have options access, a short-dated straddle/strangle can express “big move, unknown direction” while defining risk.

Risk management in a squeeze

First moves out of compression are often false breaks. Don’t chase extended candles; let retests come to you. Expect slippage and wider spreads; use limit orders where possible. Align timeframes: if you trade intraday, your invalidations should live on 1H–4H, not on the daily swing extremes. News and macro prints can act as the spark—stay aware of event risk.

Bottom line

The setup is asymmetrical: prolonged calm tends to resolve with force, but the direction isn’t guaranteed. Let the market pick a side, trade the confirmation, and keep risk tight while volatility reloads. Patience now beats hero trades inside the squeeze.

If you don't want to miss any crypto news, follow my account on X.