Three reasons why the Bitcoin price may be witnessing a big short squeeze

• As open interest in Bitcoin is on the rise and funding rates are increasingly negative, analysts predict a textbook briefly squeezing the asset.
• Analysts have identified aggressive buyers moving into Bitcoin and believe it is a clear sign of redistribution.
• $ 20,000 is considered an important psychological level for the Bitcoin price; a weak rally can result in levels below $ 20,000.

Analysts have identified an upcoming short squeeze in Bitcoin where short sellers will be forced to cover to feed a bullish narrative for the big crypto. Bitcoin price has witnessed positive momentum; however, it remains limited. Whether the global economy slips into a recession or not will be a key factor influencing investors considering taking action in the crypto market.

Also read: Bloomberg says the Bitcoin price is tied to 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 to the 200-day moving average and noted that BTC had been so far below the 200-day moving average a handful of times (<2%). Buying Bitcoin looked daunting in each of these cases; However, Clemente advises investors to acquire BTC since it has risen every time it has been in this position before.

Bitcoin 200-day trend

Clemente claims that Bitcoin is witnessing a card squeeze in the textbook. Open interest in Bitcoin is growing with increasingly negative financing rates and an increase in the asset. Meanwhile, a key indicator is rising, the Cumulative Volume Delta (CVD), which measures liquid volume inflows for assets. An increase in CVD indicates that buyers dominate the Bitcoin market.

Ki Young Juit CEO of CryptoQuant claimed that at the end of 2020, short positions in Bitcoin were liquidated in the range of $ 10,000 to $ 20,000 ahead of the parabolic bull run. 10% of the hourly market orders were from short liquidations. At present, this figure is 1%. The CryptoQuant boss therefore concluded that Bitcoin could soon witness a major card squeeze.

Bitcoin: Long-Short Squeeze Gap

Ki Young Ju told its followers on Twitter that the Bitcoin price is closer to the bottom, and BTC may witness a trend reversal after the upcoming short squeeze.

$ 20,000 is Bitcoin’s key psychological level

Rekt Capital, a pseudonymous cryptanalyst, notes that The $ 20,000 level is key support for the Bitcoin price trend and plays an important role in determining where the asset is heading. In the event of a slight rise in the Bitcoin price, the analyst expects that the Bitcoin price will fall to the level below $ 20,000.

Analysts at FXStreet warn that a Bitcoin price drop to the $ 17,600 level is possible under these conditions. For pricing and more information, watch this video: