Potential Bitcoin short squeeze may push BTC price to new heights
The cryptocurrency market experienced a week of fear, uncertainty, and doubt (FUD) as volatility led to a crash in most cryptocurrencies. Bitcoin (BTC) was not immune to this bearish sentiment, setting the stage for a potential short squeeze.
The derivatives market saw record-high open interest (OI) in Bitcoin, standing at $34.5 billion with BTC valued at $66,224 on June 15, according to data from CoinGlass. The surge in speculative demand for long and short positions has created significant imbalances that could trigger short squeezes, particularly around the $72,000 resistance level.
Professional trader Credible Crypto identified further indicators pointing towards a potential short squeeze. A bullish divergence with the cumulative volume delta (CVD) suggested that despite a downward trend in CVD indicating more market sell orders than buys, the BTC price was not following suit. This divergence indicated a possible supply shock and increased buying pressure.
While these signals may hint at a forthcoming short squeeze, technical analyses and liquidations are not definitive proof of such an event. The cryptocurrency market is constantly evolving, with traders reassessing their positions and altering market orders, open interest, and exposures, leading to unpredictable shifts in trends and volatility.
Disclaimer: The information presented here should not be construed as investment advice. Investment in cryptocurrencies is speculative and involves risk to your capital.
