Bitcoin Nears $70,000 Mark: Short-Seller Pressures Could Potentially Drive BTC to $80,000
Summary:
As Bitcoin (BTC) dances close to the $70,000 mark, market watchers suggest that increased pressure on short-sellers and quick-moving uptrends could potentially push BTC's price to $80,000. Current trading situations are reportedly causing a squeeze on short positions, which are maintained by hedge funds, while institutions hold almost 20,000 net long positions. Owing to these market dynamics, swings in Bitcoin price are becoming shorter, with a 8.7% difference over the past week between its lowest and peak prices. The impending Bitcoin halving event, set for April 21, may also be a significant influence on the current trading activity.
Bitcoin (BTC) is dancing on the edge of hitting the $70K mark, which is pressuring short-sellers and trolling downtrends in the market, potentially propelling BTC towards an $80K trading price, so says a market watcher. An uptick to fresh, all-time high territory has caught speculation short-sellers see themselves cornered, as a March 26 commentary by trading resource The Kobeissi Letter cited. The margin, a record high that separates institutional long-term positions from short hedge fund positions, primarily drives the BTC short squeeze, as explained by The Kobeissi Letter. Interestingly, institutions are placed in long positions, opposite hedge funds’ short ones. Hedge funds are maintaining around 15,000 net short contracts, while institutions are showing roughly 20,000 net longs, as noted by the post. The post also mentioned shrinking periods of Bitcoin price dips. BTC’s weekly low was $61,224 on March 20, while its high was $71,511 on March 26, illustrating only a difference of 8.7% between the low and high prices, according to data by CoinMarketCap. Right now, BTC trades at $70,480. On reaching $71,000, short positions worth $72.98 million will be forced to close, based on CoinGlass data. If it climbs to $75,000, $1.38 billion short positions will become liquidated. According to Pav Hundal, a lead analyst at crypto exchange Swyftx, it could cause BTC to reach a neoteric all-time high, which presently sits at $73,737. "The possible volatile movement in price could indeed be extraordinary. Given a short squeeze, BTC could skyrocket toward $80K, and the prospect of hitting the $100K mark later in the year can't be dismissed," stated Hundal. However, Swan Bitcoin CEO, Cory Klippsten, views the ongoing contention between long and short positions as enjoyable, noting that the tremendous capital being pumped to defend opinions is captivating. "Eventually, a side will have to give in. While we suggest to our clients to focus on the long-term, say over the next 5-10 years, I personally indulge in speculation," added Klippsten. While it appears a showdown between the bulls and bears might be ensuing, Hundal proposed asset managers are cleverly playing both sides. "It may look like a traditional face-off between bullish and bearish shareholders. Still, asset managers are balancing record amounts of long exposure to Bitcoin," elaborated Hundal, explaining that investors may balance these high-win bets by taking out shorts to guard against losses. "It isn't unusual for investors to pay a premium to safeguard their investments from plummeting," Hundal expressed. Klippsten foresees the surge in Bitcoin trading activity as a preface to the imminent Bitcoin halving that's marked for April 21. Historical data shows that speculative trading ratchets up prior to halving events. Traders typically buy based on speculation and sell once the news breaks," expounded Klippsten, cautioning, however, this could trigger a temporary drop in Bitcoin's price after the halving: "Even if the price reacts favorably, there's also a chance we see a temporary price drop post-halving.
Published At
3/27/2024 5:22:12 AM
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