Bitcoin Reaches $94K: Examining the Possibility of a Long Squeeze Following a Positive Funding Rate
Bitcoin's Long Squeeze: A Looming Threat?
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Get ready for a potential rollercoaster ride! Bitcoin's price has been on a wild ride, climbing past $95k recently, and the demand for long positions? You bet! But buckle up, fam, because the price momentum is looking a little weak, and that could lead to a long squeeze - a situation where the price takes a nose-dive as investors scramble to cut their losses on long positions.
Over the last day alone, Bitcoin's Funding Rate has turned positive again, and longs are dominating above 90k. That means most investors expect the trend to continue and possibly hit the six-figure mark, but if the momentum falters, we could be in for some choppy waters.
The price has been stuck in the $94k range for the past couple of days, despite the increase in Open Interest and funding rates. When Open Interest rises, more traders enter the market to open new positions, specifically long positions. While this is usually a bullish sign, when the price momentum starts to weaken, it can lead to a long squeeze.
Experts from Alphractal are predicting a possible long squeeze could happen in the coming hours. With traders feeling optimistic about higher prices and bears anxiety-ridden about a further hike, it's a recipe for market anxiety and a potential sharp drop on the price chart. If this happens, we could see the price drop below 90k, where longs dominate.
While a long squeeze is a real possibility, there might be some hope on the horizon. The short-term holder realized profit/loss ratio recently climbed to 1.2%, marking a significant shift. Historically, flipping this ratio positive has signaled the start of a sustained recovery on the charts. This means that the short-term holders are currently in profit, which could help stabilize the price and, potentially, avoid a long squeeze.
In order to steer clear of a long squeeze, Bitcoin needs to reclaim $95k and make another run at $96k. Keep an eye on the charts, folks, and stay prepared for some wild price swings!
Fartcoin: Can it Maintain its Surge and for How Long?
In other news, Fartcoin, the gas-pump token of the crypto world, experienced an impressive 17% surge. The question is, can it last and, more importantly, for how long? Stay tuned as we track its progress!
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Enrichment Data: Long Squeeze for Bitcoin
What is a Long Squeeze?
A long squeeze occurs when the price of a financial instrument like Bitcoin begins to fall after a period of increasing long positions, causing long holders to sell to limit their losses. This situation can lead to a cascading effect of selling, intensifying the price drop.
Causes of a Long Squeeze
- Recent Surge in Long Positions: A surge in long positions indicates that if the price were to drop or fail to advance, long holders might rush to close their positions leading to a potential long squeeze.
- Weakening Price Momentum: If price growth slows or reverses, the momentum could turn against long holders, potentially triggering a long squeeze scenario.
Market Indicators for a Long Squeeze
- Immediate Support and Resistance: BTC currently enjoys immediate support around $93,000, but there's a risk of a squeeze towards $90,000 if the price fails to break through resistance levels like $96,000.
- Recent Short Squeeze: A recent short squeeze suggests that traders are highly sensitive to price shifts, which can also impact short and long positions.
Steering Clear of a Long Squeeze
For the market to avoid a long squeeze, BTC must reclaim $95k and attempt $96k. With short-term holders in profit, they could help stabilize the price, reduce the selling pressure, and prevent a potential downward spiral.
- Bitcoin's soaring price past $95k has triggered a surge in long positions, which could lead to a long squeeze if the price momentum weakens.
- The recent 17% surge in Fartcoin mimics the pattern of Bitcoin, raising questions about its sustainability and potential for a long squeeze.
- Experts are emphasizing the importance of BTC reclaiming $95k to avoid a long squeeze, as short-term holders in profit could help stabilize the price.
- A long squeeze results from the price of a financial instrument like Bitcoin falling after a period of increasing long positions, causing panic selling among long holders.
- As Bitcoin's immediate support is around $93,000, a potential long squeeze towards $90,000 is a risk if the price fails to break through resistance levels like $96,000.
- If the market can steer clear of a long squeeze, it may experience a sustained recovery, thanks to the short-term holders currently in profit, which could help reduce selling pressure.
