Bitcoin “4th Squiggle” Forms Above Range, Short Squeeze Could Fuel Upside

Bitcoin’s “4th squiggle” structure shows consolidation above $124K, forming a trap for shorts and signaling a potential secondary breakout.

The $111K–$125K range now acts as support, with accumulation by strong hands creating favorable conditions for continued upward momentum.

BTC mirrors July’s fractal pattern: breakout, slight pullback, and consolidation above range, increasing chances of reaching $128K–$130K soon.

Bitcoin has entered a notable phase, displaying a pattern resembling July’s breakout behavior. The cryptocurrency is consolidating above prior resistance zones, creating pressure on short positions.

Daily Structure and Pattern Formation

Bitcoin recently broke above a descending trendline, reaching the $125K–$126K zone before a slight pullback. This movement mirrors the July fractal, where BTC reclaimed range resistance and then built upward momentum. The consolidation above $124K indicates strength in the market, as previous resistance may now act as support.

According to IncomeSharks, the daily chart shows a “4th squiggle” pattern. This structure typically involves fakeouts that attract short sellers, creating a liquidity trap. Traders attempting early short positions often face losses when the breakout resumes.

The current range is defined between $111K and $125K. Holding above this range is critical, as it establishes a solid base for potential upside continuation. BTC’s price action suggests accumulation by stronger market participants during sideways consolidation.

Max Pain Zone and Short Pressure

The concept of a “max pain” zone emerges when price consolidates above prior resistance. Traders often expect retracements, prompting short positions. This setup can force shorts to cover their positions as liquidity thins.

IncomeSharks notes that consolidation just above $124K could lead to another upward move toward $128K–$130K. The pattern takes advantage of impatience in retail trading, where premature bearish bets create momentum for a rally.

Market participants observing this structure may notice a shallow retracement followed by steady accumulation. Institutions and long-term holders typically take advantage of these consolidation periods to build positions before another breakout occurs.

Outlook and Key Levels

Bitcoin’s fractal pattern resembles July’s breakout rhythm: breakout, slight pullback, consolidation above the range, and potential secondary breakout. This sequence is forming once again above the $122K–$124K range.

Support below $122K is crucial. Losing $121K could break the current structure and result in a deeper test near $116K–$118K. Until that point, BTC maintains a bullish trajectory within the current consolidation zone.

IncomeSharks’ tweet emphasizes that Bitcoin’s “4th squiggle” setup is a psychological trap for shorts. Continued consolidation above prior resistance increases the likelihood of a strong upward leg, reflecting prior market behavior in July.

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