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Bitcoin has been at a price high for the past two weeks. This momentum, which surprised many, saw Bitcoin break above theoretically $65,000 is the price level again. According to price data, Bitcoin traded as low as $52,820 on September 6.
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Its recent recovery to $66,300 shows that the king of cryptocurrencies has recovered a whopping 25.5% in two weeks. In accordance with Coinglass datathis comment i the biggest gains recorded by Bitcoin in September since 2013.
However, despite this impressive rally, a large number of traders continue to bet against BTC. This ongoing trend has set the stage for a potential short squeeze, which could send the coin’s price to record highs in October. Here’s a closer look at how this happened and what might happen next.
Short Positions Dominate the Exchange
According to crypto analyst Ali Martinez, who shared his data on the social media platform X, an amazing 57.77% of Binance users with open positions are shorting Bitcoin. This means that many traders are betting on the price of Bitcoin to go down, as it maintains a strong upward momentum.
57.77% of me @binance users with open positions are missing #Bitcoin! pic.twitter.com/bWQ4d5n6MJ
– Ali (@ali_charts) September 27, 2024
However, in consideration entry of facilities and whales in Bitcoin, especially with Spot Bitcoin ETFsBitcoin is in a great position to continue trending higher in the coming week. The combination of such entry and a significant number of short positions creates the potential for a short squeeze as we enter October.
As September comes to an end, many traders set their sights on October, BTC’s historical month (Uptober). Bitcoin has many times did well in the fourth quarterwhich is when the industry generally sees increased buying pressure and institutionalization. Such a short squeeze could propel the price of the crypto beyond its previous high of $73,737 and into new price zones.
Bitcoin: Short-Term Correction on the Horizon?
While the idea of BTC is usually strong, there is also a temporary fix is ​​possible price in the coming days. The TD Sequential indicator, a popular tool used by traders to identify potential price reversals, has flashed a sell signal on the 4-hour chart. This was the case noted by Ali Martinezsuggests that Bitcoin may experience a slight pullback before resuming its upward path.
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Such a correction will act as a consolidation phase after two weeks of bullish price action, giving the market time to reset before the next big move. Following this trend, it may also cause many traders to slow down, further fueling the potential for a major short squeeze when BTC rebounds.
At the time of writing, Bitcoin is trading at $65,658.
Featured image from CNBC, chart from TradingView