The co-founders of cryptocurrency analysis firm Glassnode believe that the sudden rise in Bitcoin (BTC) could spark an even bigger rally.
Glassnode co-founders Jan Happel and Yann Allemann share the Negentropic handle on social media platform X. To tell A sudden bullish move in Bitcoin could cause a short squeeze.
A short squeeze is when a trader who borrowed an asset at a particular price in hopes of selling it cheaper to cover the difference is forced to buy back the borrowed asset against momentum, causing further price increases. occurs in
“Liquidity is the key.”
1. Bitcoin Analysis: Bitcoin surged to $42,200, providing liquidity for long positions with a neutral impulse.
2. Liquidity Gap: Price is moving towards closing a liquidity gap of over $42,000, indicating potential volatility. Approximately $659 million in liquidations occurred.
Outlook: Bullish momentum could trigger liquidation of $1 billion of short positions, pushing the market higher. ”
The founders recently stated that Bitcoin may be following a classic descending wedge pattern. This pattern is used in technical analysis to identify possible bullish reversals in asset prices.
This pattern is characterized by a series of lows and lows that form a wedge shape on the chart. As the pattern progresses, the distance between the highs and lows decreases, indicating that selling pressure is weakening. When price breaks above the wedge’s upper trend line, it is traditionally considered bullish.
At the time of writing, Bitcoin was trading at $43,436, up slightly over the past 24 hours.
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