A recent report from 10x Research suggests that Bitcoin (BTC) may be poised for a short squeeze, fueled by improving technical indicators and potential macroeconomic catalysts.
Markus Thielen, head of research at 10x Research, highlighted that Bitcoin's Relative Strength Index (RSI) has been "bottoming out," indicating that the asset might be oversold. This, combined with a negative funding rate and increasing Open Interest (OI), suggests that short traders may be holding significant positions.
Thielen also noted that the put-to-call volume ratio is leaning towards calls, indicating that traders are more optimistic about Bitcoin's future price. This, coupled with the potential for a Donald Trump victory in the US presidential election and a potential interest rate cut by the Federal Reserve, could create a favorable environment for a short squeeze.
A short squeeze occurs when short sellers are forced to buy back their positions to avoid further losses as the price of the asset rises. In the case of Bitcoin, a short squeeze could lead to a significant price increase.
While Thielen emphasized that the market is not "massively short," the combination of technical factors and potential macroeconomic events could create the conditions for a short squeeze. However, it's important to note that the cryptocurrency market is highly volatile, and any price movement could be subject to rapid changes.
Investors should conduct their own research and consider the risks involved before making any investment decisions.
