An analyst now says a massive Bitcoin short squeeze is coming stating bears are about to get wiped out due historical patterns.
The anonymous host of the InvestAnswers YouTube channel believes a short squeeze is approaching for Bitcoin (BTC).
A short squeeze occurs when traders who have borrowed an asset in order to sell it at a lower price later (and pocket the difference) are forced to buy back the asset they borrowed as the price rises against them.
This buying pressure then drives the price up further, similar to what we saw with AMC and GameStop in 2021.
According to this analyst, there are many Bitcoin bears heavily shorting BTC, meaning they have borrowed and sold the cryptocurrency in anticipation of a price decline.
This has set up a significant amount of fuel that could ignite a short squeeze rally if the price of Bitcoin starts to rise instead.
“The big story here is perpetual swap funding rates, averaged at negative levels over the past week, while open interest has sharply increased.
This suggests aggressive shorting, structurally creating a setup for a ripe short squeeze.
These are the funding rates and I encourage you to focus your eyes on the bottom with the red dips.”
The analyst noted that according to previous patterns, it has always been an opportune time to accumulate Bitcoin (BTC) when funding rates were lower and negative — as depicted below.
InvestAnswers also noted in his analysis that the crypto market is currently at ‘fear’ levels for Bitcoin, indicating the perfect time to buy.
The cryptocurrency is up more than 43% this year-to-date, and is currently trading at $63,437.90 at the time of this publication.
Is a Bitcoin short squeeze coming?
According to InvestAnswers, there’s a strong probability of a Bitcoin short squeeze happening soon.
But I’d love to hear your thoughts on this — leave a comment down below.
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Also Read: Kamala Harris Is Now Proposing Raising Crypto Tax to 28%
Other Crypto News Today
75% of Bitcoin (BTC) has now been held for more than 6 months according to fresh on-chain data that has been released.
A recent analysis of Bitcoin’s blockchain activity reveals that a significant portion of the cryptocurrency, roughly three-quarters, has remained untouched for at least six months.
This data, gathered by the blockchain analytics platform Glassnode, indicates that a large amount of Bitcoin is being held long-term, suggesting a strong belief in the asset’s future value.
This trend is particularly noteworthy given the recent price decline of Bitcoin, which has fallen by 21% from its all-time high.
Just a week ago, only about 45% of Bitcoin was inactive for at least six months, showing a rapid increase in long-term holding.
This suggests that despite recent price fluctuations, many Bitcoin holders remain confident in the asset’s long-term potential.
The fact that a large portion of Bitcoin hasn’t moved in months suggests that many investors are treating it as a long-term investment, holding onto it with the expectation that its value will rise in the future.
This “hodling” behavior also has the effect of reducing the amount of Bitcoin available for trading.
With less Bitcoin available and demand remaining high, the price of Bitcoin could potentially increase.
Experts had recently touched on Bitcoin’s major drop, but the cryptocurrency has now recovered since it’s monthly lower levels.
At the time of this publication, Bitcoin (BTC) is trading at 59,036.50.
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Also Read: Here Is What Experts Are Now Saying About Bitcoin’s Plunge
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