Bitcoin ($BTC) is once again showing a price pattern that seasoned traders recognize — a slow, steady consolidation just above a key range. According to market watchers, this current setup mirrors what we saw in July, where BTC quietly built strength before catching bears off guard with a powerful rally.
This “4th squiggle” — as dubbed by some analysts — refers to a recurring movement on the chart that often precedes a sharp move. Historically, when Bitcoin holds above range resistance and trades sideways, it leads to what traders call a “max pain” scenario. Why? Because it tempts too many traders into short positions.
The Trap for Short Sellers
When price consolidates just above resistance, many assume it’s a fake-out — a common cue for shorting. But this setup often leads to a short squeeze, forcing those betting against Bitcoin to cover at higher prices.
In July, a similar pattern played out. BTC hovered above a key level before exploding upward, liquidating shorts along the way. The current structure suggests the market may be setting the stage for a repeat performance.
Traders are warning that this range-high consolidation could be a deliberate “pain trade,” designed to trap those expecting a breakdown. If volume increases and the macro environment remains stable, BTC could break higher, leaving short sellers scrambling.
$BTC – 4th squiggle. Similar price action as to what we saw in July. Consolidating above the range would be max pain. Too many are going to try to short this. pic.twitter.com/keOw8S02Y6
— IncomeSharks (@IncomeSharks) October 7, 2025
What to Watch Next
All eyes are now on how long Bitcoin stays above the range. If it continues to consolidate without breaking down, the probability of an upside breakout increases. Bulls should look for a strong candle with volume above recent highs, while bears must remain cautious of overleveraging their shorts.
The market remains in a wait-and-see mode, but history suggests the “max pain” move could be another leg higher — not lower.