Bitcoin and Ether are showing signs of a potential squeeze as traders have amassed record short positions in Ether (ETH), particularly around the $4,300 level. This situation arises amidst a broader market context of fluctuating prices and cautious sentiment among traders.

Bitcoin (BTC) has recently attempted a rebound, reaching $116,000 after the Wall Street opening on Monday, as bulls aim to trigger a short squeeze. However, the cryptocurrency market has experienced significant liquidations, with around $500 million in long positions wiped out in a 24-hour period. This cross-crypto sell-off reflects the existing market weakness and trader apprehension, with many anticipating further lows for both Bitcoin and altcoins. Bitcoin is currently trading at $116,031.

Market analysts have presented varied perspectives on Bitcoin's near-term trajectory. One popular trader, BitBull, suggests that Bitcoin may consolidate between $112,000 and $120,000 during the third quarter, while altcoins potentially move higher. BitBull also cautioned about a possible "capitulation wick" below $112,000, mirroring a previous pump above $124,000. Another analyst, Michaël van de Poppe, believes that failure of Bitcoin to surpass $116,800 could lead to a sweep of the lows, potentially triggering a "start of bear market" sentiment.

Adding to the complexity, speculative Ether traders have built the largest leveraged short position in history. This extreme positioning makes Ether particularly vulnerable to a short squeeze, where a sudden price increase forces short sellers to cover their positions, further driving up the price.

These dynamics coincide with broader market concerns, including the anticipation of the U.S. Federal Reserve's Jackson Hole symposium, which may be prompting some crypto traders to reduce their risk exposure.

In the backdrop of these market movements, the NFT market has also experienced a downturn, with valuations of NFT collections falling by over $1.2 billion in less than a week. This decline is correlated with a decrease in Ether's price, as many NFTs are minted on the Ethereum network and their values are often denominated in ETH.