As Bitcoin nears the critical $70,000 threshold, market analysts observe a significant squeeze on short sellers that could propel its value to the $80,000 mark. The current market trend shows a shift from downward pressures to stronger upward momentum, prompting discussions on the digital currency’s potential price trajectory in the near term.
Market Signs Indicate a Squeeze on Short Sellers
The Kobeissi Letter, in its recent update, highlighted the tightening of short positions as Bitcoin makes its way to record highs. This situation, described as a squeeze, mainly results from a substantial margin between long positions held by institutions and shorts by hedge funds, indicating a bullish sentiment in the market.
Recent Performance and Predictions for Bitcoin
Bitcoin’s value fluctuated between $61,224 and $71,511 over the past week, with a trading price of $70,236 at the time of reporting. Information from CoinGlass suggests that an ascent to $71,000 could trigger the liquidation of $156.18 million in short positions, while a surge to $75,000 could liquidate shorts worth $3.85 billion.
Swyftx’s lead analyst Pav Hundal commented on the possibility of the cryptocurrency reaching new peaks, suggesting that if a short squeeze occurs, we could witness Bitcoin’s price “vertically shoot” towards $80,000 and beyond, with the $100,000 milestone becoming a realistic target within the year.
Adding to the discourse, Cory Klippsten, CEO of Swan Bitcoin, shared his enjoyment of the ongoing battle between long and short positions. He emphasized the significance of the standoff, as actors fortify their positions with more capital. Hundal further noted that asset managers might be hedging with both long and short positions, not necessarily representing a traditional bullish versus bearish scenario, but rather a strategy to mitigate risks. This dual approach is indicative of the complex games played by institutional investors in the Bitcoin market.