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bitcoin has seen incredible price momentum over the past two weeks. This momentum, which took many by surprise, saw bitcoin surpass the psychological price level of $65,000 again. According to price data, bitcoin traded as low as $52,820 on September 6.
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Its recent bounce to $66,300 indicates that the cryptocurrency king has rallied substantially by 25.5% in two weeks. According Currency datathis marks the biggest gains recorded by bitcoin in September since 2013.
However, despite this impressive rally, a significant number of traders continue to bet against btc. This current trend has set the stage for a possible short squeeze, which could see the coin's price soar to new all-time highs in October. Here's a closer look at how this is happening and what could happen next.
Short positions dominate the exchange
According to crypto analyst Ali Martinez, who shared his insights on social media platform This means that many traders are betting on the price of bitcoin to decline, even as it maintains strong bullish momentum.
<blockquote class="twitter-tweet”>
57.77% of twitter.com/binance?ref_src=twsrc%5Etfw” rel=”nofollow”>@binance users with open positions are short twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin! pic.twitter.com/bWQ4d5n6MJ
– Ali (@ali_charts) twitter.com/ali_charts/status/1839557022330528159?ref_src=twsrc%5Etfw” rel=”nofollow”>September 27, 2024
However, considering the institutional and whale influx in bitcoin, especially through bitcoin Spot ETFbitcoin is still largely in a position to maintain an uptrend over the next week. The combination of such inflows and the significant volume of short positions creates the potential for a short squeeze as we approach October.
As September comes to a close, many traders are keeping an eye on October, which is historically a bullish month for btc (until October). bitcoin often performed well in the fourth quarterwhich is when the industry typically sees increased buying pressure and institutional inflows. Such a short squeeze could further push the cryptocurrency's price beyond its previous all-time high of $73,737 and into new price territories.
bitcoin: Short-Term Correction on the Horizon?
Although the prospects for btc is generally bullish, there is also the possibility of a short-term correction in the price in the coming days. The TD Sequential indicator, a popular tool used by traders to identify potential price reversals, has shown a sell signal on the 4-hour chart. This phenomenon was x.com/ali_charts/status/1839663281759252591″ target=”_blank” rel=”nofollow”>scored by Ali Martínezsuggesting that bitcoin could experience a brief pullback before resuming its upward trajectory.
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Such a correction would serve as a consolidation phase after two weeks of bullish price action, giving the market time to reset before the next big move. Following this trend could also cause more traders to short, further fueling the potential for a larger short squeeze when btc recovers.
At the time of writing, bitcoin is trading at $65,658.
Featured image from CNBC, chart from TradingView
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