- As open interest in Bitcoin is on the rise and funding rates are increasingly negative, analysts predict a textbook short squeeze in the asset.
- Analysts have identified aggressive buyers moving into Bitcoin and believe it is a clear sign of redistribution.
- $20,000 is considered a key psychological level for Bitcoin price; a weak rally could result in sub-$20,000 levels.
Analysts have identified an upcoming short squeeze in Bitcoin whereby short sellers will be forced to cover fuelling a bullish narrative for the big crypto. Bitcoin price has witnessed positive momentum; however, it remains range-bound. Whether the global economy slips into a recession or not will be a key factor influencing investors contemplating making moves in the crypto market.
Also read: Bloomberg says Bitcoin price is bound for a bullish breakout under one condition
Analysts predict a short squeeze in Bitcoin
Will Clemente, a Lead Insights Analyst at Blockware, compared the Bitcoin price trend with the 200-day moving average and noted that BTC had been this far below its 200-day moving average a handful of times (<2%). Purchasing Bitcoin looked terrifying in each of these instances; however Clemente recommends investors scoop up BTC since it has rallied each time it has been in this position in the past.
Bitcoin 200-day trend
Clemente argues that Bitcoin is witnessing a textbook short squeeze. Open interest in Bitcoin is rising with increasingly negative funding rates and a rally in the asset. Meanwhile, a key indicator, the Cumulative Volume Delta (CVD) that measures liquid volume inflow for assets, is rising. A rise in CVD indicates buyers are dominating the Bitcoin market.
Textbook short squeeze $BTC
Open interest rising with increasingly negative funding rates as price grinds up. (Shorts)
Meanwhile, CVD rising indicating spot bidding. pic.twitter.com/ARI27bvpCU
— Will Clemente (@WClementeIII) July 16, 2022
