Bitcoin is preparing for a “massive” short squeeze; the price may go “vertical”
As the Bitcoin (BTC) price approaches the $70,000 mark, there are speculations that short sellers are feeling the pressure due to a diminishing downtrend and a faster uptrend, which could push the Bitcoin price towards $80,000, according to an analyst .
“This is a textbook sign that shorts are getting squeezed as we reach a new all-time high,” trading resource The Kobeissi Letter said in a March 26 X post.
Kobeisi's letter explains that the main factor behind the BTC short squeeze is that the margin between institutional long positions and hedge fund short positions is "at an all-time high."
Net long positions of institutions versus net short positions of hedge funds.
“While hedge funds hold about 15,000 net short contracts, institutions hold nearly 20,000 net long contracts,” the report added.
Meanwhile, it notes that Bitcoin's price decline "continues to get shorter and shorter."
Over the past seven days, Bitcoin hit its lowest point at $61,224 on March 20 and peaked at $71,511 on March 26, representing a gap of just 8.7%, according to CoinMarketCap data.
The current price of Bitcoin is $70,480. If it reaches $71,000, short positions worth $72.98 million will be liquidated, according to CoinGlass. An increase to $75,000 would eliminate $1.38 billion in short positions.
Lead analyst at cryptocurrency exchange Swyftx Pav Hundal told Cointelegraph that this could lead Bitcoin to all-time highs. Bitcoin's all-time high is currently $73,737.
“The possibility of a sharp price movement is now off the charts. If we see a short squeeze, Bitcoin could rise to $80,000, and then you'll really start thinking seriously about the $100,000 mark at some point this year,” Hundal said.
Asset managers with long-term exposure to BTC are at an all-time high.
Swan Bitcoin CEO Corey Klippsten told Cointelegraph that while he enjoys seeing the ongoing tug-of-war between longs and shorts, eventually one faction will split.
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