TradingKey – Bitcoin (BTC) extended its rally on Friday, July 4, climbing nearly 1% to an intraday high of $110,529 before pulling back slightly to $109,483 at press time.

Bitcoin Price Chart – Source: TradingView.

With BTC now just $1,000 shy of its all-time high at $120,000, investor focus has shifted to whether the breakout can continue. However, bullish sentiment is fading, and bearish positioning is on the rise. According to Coinalyze, the long/short ratio has dropped from 1.223 to 0.858, indicating that short sellers are gaining the upper hand.

Despite this shift, Coindesk analyst Oliver Knight suggests that the growing dominance of short positions could actually set the stage for a short squeeze — a scenario where a breakout above the all-time high forces short sellers to cover their positions, triggering a wave of buy orders and driving BTC even higher.

This dynamic reflects a broader tug-of-war between technical resistance and market positioning. If Bitcoin can decisively break above $120K, it may unleash a powerful upside move fueled by forced liquidations and stop-loss triggers.

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