Bitcoin’s been on a rollercoaster lately, but things are looking up! After a dip, it’s rebounding from strong support around $115,000 and could be heading for new highs. A crypto analyst, Luca, on X (formerly Twitter), suggests a short squeeze might be brewing.
Market Makers’ Master Plan?
Luca believes market makers orchestrated the recent price swings. The initial drop was likely a trap to shake out traders holding long positions (betting on price increases). Then, bam! A sudden reversal caught those betting against Bitcoin (short positions) off guard, wiping out their positions and triggering massive liquidations. This happened even as indicators like the Bitcoin funding rate were falling, suggesting a surprising move.
The Numbers Tell a Story
Some key data points support Luca’s theory:
- Funding Rate: The Bitcoin funding rate dipped below 0.01%, indicating less bullish sentiment.
- Bitcoin Premium: This metric also went negative.
- Open Interest: This soared during the price drop, then rose again as the price recovered – a strong sign of short positions being squeezed. It’s currently at an all-time high, exceeding $80 billion daily on average.
Shorts are in Trouble
The high open interest, combined with a Binance Long/Short ratio showing shorters dominating (53.97% vs 46.03% long), strongly suggests a potential short squeeze. If this happens, Bitcoin could skyrocket, potentially surpassing $123,000 and liquidating tens of thousands of short positions. The market is definitely buzzing!
