Bitcoin Short Squeeze on the Horizon?
The Bitcoin market is showing diverging trends in the spot and futures markets. While the spot market is experiencing increased buying pressure, the futures market is showing bearish sentiment. This divergence could lead to a short squeeze, potentially propelling Bitcoin towards $100,000.
Spot Market: Growing Buying Pressure
The Bitcoin spot market is showing a surge in buying pressure, indicated by the rising Spot Cumulative Volume Delta (CVD). This metric reflects the net buying or selling activity in the spot market, and its positive trend suggests increasing demand for Bitcoin. As more investors purchase Bitcoin directly, the price is being driven upwards.
Futures Market: Bearish Sentiment and Increased Selling
In contrast to the spot market, the Bitcoin futures market is exhibiting bearish sentiment. The Perpetual CVD, which tracks the net buying or selling in the perpetual futures market, is declining more rapidly than the Bitcoin price. Additionally, there is an increase in selling pressure in the perpetual contracts. This divergence between the spot and futures market creates the conditions for a potential short squeeze.
Short Squeeze: A Possible Catalyst for Price Breakthrough
The combination of increasing spot buying and bearish sentiment in the futures market could lead to a short squeeze. In a short squeeze, investors who have bet on the price of Bitcoin falling are forced to buy back their positions to cover their losses, pushing the price even higher. This scenario could potentially propel Bitcoin towards the $100,000 mark.
