Bitcoin Price
Bitcoin’s Ongoing Surge Could Gain Steam as Shorts Are Underwater
Nick Chong | Nov 04, 2020 | 01:40
- Bitcoin has seen immense volatility over recent days.
- The coin currently trades for $13,800, above the $13,200 lows on Monday but below the daily highs at $14,100 and the weekend highs at that same level.
- Bitcoin is currently up around 1.5% in the past 24 hours.
- Some analysts think that the coin is primed to move higher due to the futures market.
- One analyst shared data showing that the cryptocurrency’s futures markets are clearly bearish at the moment.
- The issue is, according to the analyst, many of these shorts are bearish while the funding rate is also negative.
- This could result in a short squeeze that pushes Bitcoin higher.
Bitcoin Could Move Even Higher, Futures Data Shows
Bitcoin has seen immense volatility over the past few days ahead of and during the presidential election in the U.S. The leading cryptocurrency currently trades for $13,800, above the $13,200 lows on Monday but below the daily highs at $14,100 and the weekend highs at that same level.
Bitcoin is currently up slightly in the past 24 hours as volatility swings the cryptocurrency between $13,000 and $14,000.
Analysts say that the coin is likely to press higher in the hours and days ahead. One crypto-asset analyst shared the chart below early, showing that the cryptocurrency’s futures markets are clearly bearish at the moment. The issue is, according to the analyst, many of these shorts are bearish while the funding rate is also negative. This strongly increases the chances that Bitcoin will undergo a short squeeze, driving prices rapidly to the upside.
“Meanwhile funding has been consistently negative the past couple of days on Binance and the L/S ratio has also been going down too (more shorts). This looks to me like a bunch of over-leveraged shorts are underwater.”
Chart of BTC's price action over the past few weeks with analysis by crypto trader Byzantine General (@ByzGen On Twitter). Source: BTCUSD from TradingView.com
The funding rate is the fee that long positions pay short positions on a recurring basis to keep the price of the future to the price of the spot market. Negative funding rates combined with increasing prices increases the chance that a short squeeze takes place.
Election Uncertainty Could Drive Correction
Election uncertainty could result in this scenario not playing out.
Multiple analysts have noted how uncertainty around this election could result in movements in markets like the dollar and Bitcoin due to differing economic/fiscal policies.
For one, BTC has already bounced $400 and crashed $300 due to the election.
Featured Image from Shutterstock Price tags: btcusd, btcusdt, xbtusd Charts from TradingView.com Bitcoin's Rally Past $14,000 Could Gain Steam as Shorts Are Underwater
