Bitcoin Short Squeeze May Reach $30K, Crypto Trader Predicts

As Bitcoin breaks out of the $21k level, many crypto analysts have started predicting further rallies for the asset. One of the famous crypto strategists, CryptoCaleo, recently predicted a high price for the world’s largest cryptocurrency.

Addressing his more than 550,000. Followers on Twitter, Kalio says BTC is preparing for a rally to $30,000. Bitcoin last saw $30,000 during a bear market in June 2022. However, crypto strategists believe that there will be volatility as Bitcoin targets $30,000, despite its bullish stance.

In his words, the market should expect further declines before Bitcoin reaches $30,000. According to Kaleo, there will be some lows below $20k, which will trigger lower positions before Bitcoin is ready for a short squeeze.

A short squeeze occurs when crypto traders borrow assets at a certain price, hoping to sell them short and keep the difference. These traders often use overleveraged short positions in the futures market. However, traders will have no choice but to buy leveraged assets as rising prices push against them, creating further rallies as market makers pull out their liquidity to maintain momentum.

Cleo believes a short squeeze is imminent as the price of BTC has jumped over 23% in seven days.

A Bitcoin rally could signal increased volatility.

BTC has given several testimonies. Bullish indicators As of the start of 2023, that has brought it to a year-to-date high of more than $21,000. Bitcoin’s rapid rallies have raised hopes among crypto traders that the prolonged bear market may soon end.

I have decreased. Bitcoin Fear and Greed Index to Neutralizewhich may lead to an increase in trading volume.

Increase in mass Bitcoin trading volume After the recent price hike. Over the past week, Bitcoin’s trading volume has more than doubled from its initial value, rising 114 percent to $10.8 billion.

Bitcoin
Bitcoin Trading Volume, Source: Arcane Research

An increase in trading volume often leads to an increase in volatility. Bitcoin current The seven-day volatility level The 2022 rate of 2.4% is down from 3.1% but held steady during the recent rally. It is likely that a sustained increase in trading volume during a rally may cause volatility to increase.

Centralized exchanges (CEXs) had to contend with lower trading volumes, which meant lower transaction fees and revenue, including staff layoffs. Therefore, increasing trading volume is a welcome development for exchanges and BTC traders.

Bitcoin’s recovery continues as profits and trading volume increase.

According to Glass node data, The off-chain profit for BTC returns to the Adjusted Spent Output Profit Ratio (aSOPR) value of 1.0. Some analysts believe this is a key resistance level. The aSOPR historically indicates a change in the total market cycle when increased demand (trading volume) absorbs profits.

BTC’s on-chain realized profit-to-loss ratio has crossed the 1.0 mark, recording a 1.56 profit compared to losses on January 16. This indicated a reversal of the downward trend beginning in May 2022. An increase in profit achieved without a decrease in price indicates market strength.

On-chain analytics from Glassnode also suggest that the BTC price recovery continues. As the market absorbs more selling pressure without price declines, the overall fear and macro shift will subside.

Technically, volatility, trading volume, and realized profits are moving. Separation of BTC from Equities. Bitcoin’s past price action has been relative to US equities.

Bitcoin Short Squeeze Could Reach $30,000, Top Crypto Trader Predicts
Bitcoin Price Floats Above $21,000 Mark l BTCUSDT on Tradingview.com

Equity can be due to accumulation of assets by institutional investors. This correlation has weakened now that institutional investors hold less BTC and may exit the market in the future.

Featured Image from Pixabay, Charts from Tradingview.



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