Crypto NewsAnalysisCritical Short Squeeze Alert in Bitcoin (BTC): Chief Economist Warns

Critical Short Squeeze Alert in Bitcoin (BTC): Chief Economist Warns

Finally, according to the analyst, Bitcoin, which has recently surpassed the $ 44,000 barrier, may experience a short squeeze in the near future.

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Bitcoin (BTC) price broke the $42,000 mark on Monday and today broke through $44,000 for the first time in over a year, prompting the liquidation of a significant number of leveraged positions.

BTCM Chief Economist Youwei Yang identified $45,000 as the next key resistance level for Bitcoin, suggesting that the likelihood of a short squeeze increases above this threshold. “Bears may face the risk of a short squeeze if Bitcoin breaks above $45,000, the next important resistance level,” Yang said.

A short squeeze is defined as a market event that triggers a rapid rise in prices in a stock or any asset. It typically occurs when the asset is significantly shorted, meaning many investors are betting that its price will fall.

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Yang also noted existing highly leveraged positions that could be reset if the market becomes increasingly volatile. “There is currently a possibility of higher market volatility, such as both a short squeeze and long liquidation at the same time in a short period of time,” Yang added.

Bitfinex analysts, on the other hand, highlighted two Bitcoin price levels that saw significant liquidations due to recent fluctuations in the market and said: “We can currently see large short liquidations at $ 41,950 and then at $ 42,200.”

Analysts had suggested that above these levels, the Bitcoin price could experience a “bullish breakout” due to forced liquidations that short investors are forced to buy to close their trades.

*This is not investment advice.

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