The crypto market posed a recovery over the last couple of days. Large-cap coins were mostly trading in green during the said period. Bitcoin, on its part, was able to stay above the psychological $20k mark.
Interestingly, the largest crypto asset had seen the highest level of trading volume and address activity. Per Santiment, both the said metrics hit 4-month highs a few hours back and have been treading around their mid-June high levels.
Bitcoin and its short squeeze
Despite the recent price rise, participants were seen betting against the price of Bitcoin, and the market was typified by short traders. With the asset’s valuation moving in the direction opposite to expectations, sellers were “squeezed” out of the market. Highlighting the scenario that unfolded, Ki Young Ju, the Co-Founder, and CEO of CryptoQuant, tweeted,
“BTC short squeezes occurred for the last two consecutive days. Short liquidations across all exchanges reached a year-high.“
Worth recalling that in late 2020, when participants were punting short positions on Bitcoin, they were mostly rekt in the $10-$20k range, after which the parabolic recovery materialized. As highlighted above, a fresh short squeeze has already transpired, and even though it has the potential to guide the asset’s price up north, it does guarantee a rally straight off the bat.
For a parabolic recovery to take place, institutions will have to play a crucial role. However, as analyzed recently, the market has not yet concluded the “apathetic period” that began in September, for inflows remain to be quite meager.
Read More: Bitcoin, Altcoin Interest match October 2020 lows
Resultantly, at press time, the market was again characterized by weakness. Bitcoin was trading at exactly $20200—the level that has been resisting it from climbing higher since mid-September. Only if it breaks above the said hurdle would it be able to re-acclaim yesterday’s and day-before’s highs around the 100 MA on the daily.
If sellers continue to have a dominant hand, then, a re-visit to $19.6k and $19.02k can be expected going forward.
