Bitcoin (BTC) experienced a sharp rise after months of decline.
While this rise pleases the bulls, it is noted that this increase is not due to a real trend reversal.
Speaking to Coindesk, Mark Connors, Chief Investment Officer at Risk Dimensions, stated that the rise in Bitcoin was due to a short squeeze event.
“This rise is clearly a short position clearing, as the Iranian attacks led to a rebalancing across the entire capital structure and Bitcoin gained momentum as spot bitcoin ETF outflows reversed.”
According to the analyst, the purging of short-bound investors could push the price higher in the short term.
However, the analyst noted that this is not a signal of a shift to an upward trend, stating, “This is not a signal of a reversal towards $100,000 and the crucial $75,000 resistance level.”
According to the analyst, the recent rise does not yet signal a definitive break from the broader downtrend. Significant resistance levels remain, and without consistently increasing spot demand, the bounce could end as quickly as it began.
Santiment, an on-chain analytics platform, stated that the recovery was likely driven by buying, primarily from short-term individual investors.
*This is not investment advice.
