- Bitcoin shorts could contribute to higher prices in a short squeeze scenario
- At press time, bulls remained in control despite the recent highs and growing expectations of downside
AMBCrypto previously looked at the possibility of long liquidations if Bitcoin retraces after attaining it most-recent all-time high. Well, despite being overbought, sell pressure remained weak across the board and at press time, BTC holders were still going strong.
One of the main reasons why Bitcoin sell pressure has not taken over is because market confidence was still strong after the recent top. Heavy Bitcoin ETF inflows in the last 24 hours contributed to this. ETF flows have proved to be a relatively accurate measure of market confidence. In fact, according to Bloomberg’s Eric Balchunas,
“HOOVER CITY: Bitcoin ETFs took in a record-smashing $1.4b yesterday (the Trump effect). $IBIT alone was +$1.1b. That’s +$6.7b in past mo and $25.5b YTD. All told they feasted on about 18k btc in one day (vs 450 mined) and are now 93% of the way to passing Satoshi’s 1.1mil btc.”
The surge in ETF inflows may push Bitcoin to greater highs. A recent cryptoQuant analysis recently looked into the possibility of such an outcome forming a short squeeze. According to the analysis, while the Open Interest was high, the funding rates were negative.
Negative funding rates historically indicate a shift in market sentiment, specifically, to a bearish outlook in the derivatives segment. This shift was supported by Coinglass’s BTC long/short ratio which revealed that shorts were higher than longs over the last 3 days.
Source: Coinglass
This surge in short positions was likely because derivatives traders anticipated the previou
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Author: Michael Nderitu
