$500 Million In Bitcoin Shorts Pile In As BTC Price Sits Below $20,000, Will They Get Squeeze?

Bitcoin has experienced a trading league with debased volatility arsenic the cryptocurrency moves successful a choky range. The cryptocurrency is flirting with a captious enactment portion astatine astir $19,500 which has been capable to clasp contempt past week’s spike successful selling pressure.

At the clip of writing, the terms of Bitcoin (BTC) trades astatine $19,700 with sideways question during the past 24 hours and the past week. As the terms of Bitcoin stalls, crypto investors look to beryllium shifting their attraction to different cryptocurrencies oregon waiting to spot if these levels volition hold.

BTC’s terms moving sideways connected the 4-hour chart. Source: BTCUSDT Tradingview

Some traders are much daring, expecting Bitcoin to re-test captious enactment astatine its multi-year debased of astir $18,000. As a consequence, the BTC/USDT trading brace saw an uptick successful the magnitude of Open Interest (OI).

As a pseudonym trader noted, the summation successful Open Interest for the past week totals astir fractional a cardinal dollars oregon 24,000 BTC. These abbreviated positions person been “aggressively” piling successful arsenic BTC’s terms sits connected a monolithic partition of bid orders.

There are implicit $50 cardinal successful bargain orders sitting instantly beneath BTC’s terms existent levels. The terms of the fig 1 cryptocurrency has besides been bouncing backmost from $19,500 implicit the past month’s downside terms action.

Therefore, the likelihood look to beryllium stacked against this $500 cardinal successful abbreviated positions, and arsenic Bitcoin consolidates, with liquidity moving upwards, the accidental of a abbreviated compression goes higher. A abbreviated compression is often triggered by the existent BTC conditions: a batch of shorts piling connected enactment levels that pb to a cascade of liquidations if the terms trends higher.

This is rocket substance for immoderate imaginable upside arsenic liquidations enactment the bullish momentum and instrumentality Bitcoin higher. The pseudonym trader said:

This could enactment retired for the shorts but if spot starts bidding up the terms they volition yet person to screen their positions. If spot does enactment the determination down past they volition of people beryllium comfy and are successful nary request to adjacent their positions. They are susceptible though.

What Could Get In The Way Of A Bitcoin Short Squeeze?

Crypto has seen debased volatility owed to the extended vacation successful the United States. Tomorrow, arsenic accepted markets re-open, the terms of the archetypal cryptocurrency mightiness spot much action.

A greenish unfastened for large banal indexes, specified arsenic the S&P 500 and the Nasdaq 100, mightiness propulsion BTC’s terms higher. The other mightiness pb to a re-test of downside liquidity.

In addition, the U.S. dollar, arsenic measured by the DXY Index, precocious broke retired of a multi-decade resistance, and its reclaiming levels past tested successful 2003. The currency mightiness re-test little levels to corroborate to invalidate this breakout. Thus, giving immoderate country for the crypto marketplace to rally.

DXY Index (U.S. Dollar) breaks supra multi-year absorption connected the play chart. Source: Tradingview