The Short Squeeze we’ve been publishing about is underway and is in the early stages. We’re currently eyeing a resistance of $7290 on Bitcoin. This is a crucial gap-fill, on spot exchange VPVR and CME futures.
We expect the Cryptocurrency to settle between $7,295 and $7,351 in the next 48 hours or sooner, depending on trading volume, which we’ll cover in the next section.
Bitcoin price is on the rise, and the case of daily trading volume has been over the last 2 days, with several volume surges, and followed with smaller, compounding volume.
For this rally to sustain, volume needs to sustain as well. In the last 48 hours Bitfinex volume has risen from 11,000 BTC to 33,000 BTC which is very promising.
Continuation is highly dependent on volume, and if volume continues to grow we should expect to see a major rally unfold!
A price vs BTCUSDSHORT assessment highlights that there are currently some 11,000 short positions under threat of liquidation.
Shorts have dropped from 39,000 to 31,994. A reduction of 20% in shorts covering along with bulls buying the dip resulted in an 18% price increase in BTC.
We believe this is the beginning, as we’re expecting another 43% in short reduction. Volume and volatility will need to work together to achieve a violent short squeeze.
We’re currently seeing shorts cover but not at an alarming rate. If trading volume can grow, and liquidate or trigger more short-seller stops, we can expect a major upwards move in BTC, for a possible target of $8,550.
The above target is calculated utilizing the chart below, the previous 41% short squeeze in April, and how it reflected in Bitcoin’s price during the squeeze.
It is not a mystery that markets move both ways, even though our narrative has been bullish for quite some time. If Bitcoin was to experience a pullback we see 3 key support levels as follows:
The 23% Fib, at $6,841 with a wick to $6,729 the low volume VPVR node.
Next is the 38% Fib, at $6,675.
And Finally the 50% Fibonacci retracement level which coincides with the largest volume node.
The above levels are safe and healthy pullback levels in order to maintain a bullish continuation, with the opportunity to attract more short-sellers to add fuel to the squeeze.
Author: George Saber. Please check my BlockDelta profile for my contact details.