Bitcoin traders are actively shorting BTC on Deribit and Binance, according to onchain analytics company Santiment. The positive aspect of this scenario is that price increases are more likely to result from probable liquidations. As long as traders continue to wager against Bitcoin’s price, a comeback to $30,000 is more feasible, according to Santiment.
https://x.com/santimentfeed/status/1704583654293299227?s=20
A short squeeze happens when numerous traders bet against a cryptocurrency asset and its price increases instead. It may result from the likely liquidation of excessive shorts.
This dynamic has helped drive up the price of bitcoin recently. According to Santiment, Bitcoin has increased by around 4% since the recent boom in short selling started. It continued by stating that there is a strong chance that this trend will continue.
At the time of writing, BTC has dropped $26,766 or 1.70% on the previous day. The latest Fed interest rate announcement on Wednesday was followed by a fall in the cryptocurrency markets.
The Fed maintained the same interest rates while leaving room for future hikes. The S&P 500 then dropped to four-week lows.
Crypto expert Ali identifies an odd pattern that has affected the price of BTC in recent months as Bitcoin attempts to reach the $27,500 threshold. He observes that since mid-April, the price of Bitcoin has retraced everytime the RSI on the 4-hour chart reaches 73.31.
He claims that this is taking place once more when BTC gets closer to a descending resistance trendline at $27,440. A further decline, according to Ali, may bring Bitcoin below $25,200 or lower, offering a possible “buy the dip” opportunity.
The start of a bull run, however, may be signalled by a 4-hour candlestick close over $27,440, so traders should keep a watch out for this.
On-chain Bitcoin activity is now significantly higher than it has been since April.
A Glassnode onchain analyst named Checkmate claims that since mid-April, the Bitcoin mempool has not cleared. With strong activity signs but cyclically low transfer volumes, this increase in blockspace need is unexpected. The Glassnode expert speculates that mempool congestion may have resulted from inscriptions.
