3 Key Signals Suggest Bitcoin Could Be Primed for a Short Squeeze
🔥 Key Takeaways
Bitcoin’s Volatile January: A Perfect Storm for a Short Squeeze?
January has been a rollercoaster ride for Bitcoin (BTC), with the coin reaching a nearly four-week high before briefly dipping below $90,000. Amid this volatility, analysts are pointing to several key signals that could indicate an upcoming short squeeze.
Signal 1: Rising Short Interest
According to data from crypto analytics firm, Glassnode, short interest in Bitcoin has been on the rise. This means that an increasing number of investors are betting against the coin, potentially creating a scenario where a short squeeze could occur.
Signal 2: Futures Market Data
Futures market data also suggests that a short squeeze may be on the horizon. The funding rate, which measures the cost of holding long positions in perpetual futures contracts, has been trending upward. This indicates that traders are increasingly bullish on Bitcoin, which could lead to a short squeeze if shorts are forced to cover their positions.
Signal 3: Technical Indicators
Technical indicators, such as the Relative Strength Index (RSI), are also flashing warning signs for shorts. The RSI measures the speed and change of price movements, and a reading above 70 indicates overbought conditions. With Bitcoin’s RSI currently hovering above 70, a correction could be imminent, potentially triggering a short squeeze.
Conclusion
While no one can predict with certainty what Bitcoin’s price will do next, these three key signals suggest that a short squeeze could be on the horizon. As always, traders should exercise caution and do their own research before making any investment decisions.
Read Also Epochs
