- On-chain data indicates that traders are largely going short, which could eventually lead to a short squeeze that puts upward pressure on BTC.
- Since the beginning of last week, there has been an increase in short positions, resulting in a +4% increase in BTC price. The likelihood of this trend continuing is quite high.
- Martinez shows a pattern emerging since mid-April; when the RSI reaches 73.31 on the 4-hour chart, it suggests a scenario where the Bitcoin price undergoes a correction.
The analytics firm shows that traders in Bitcoin are heavily short-selling; This could lead to an upward explosion!
Bitcoin Traders’ Behavior Changed to Short
Bitcoin (BTC), the world’s largest cryptocurrency, has been hovering around $27,000 for a while now, where the network has seen strong trader and network activity. On-chain data shows that traders are heavily shorting, which could eventually bring about a short squeeze that could put upward price pressure on BTC.
Analytical firm Santiment indicates that Bitcoin traders on both Deribit and Binance have adopted a strong bearish stance. This increases the potential for liquidations and could push prices higher.
Since the beginning of last week, there has been an increase in short positions, resulting in a +4% increase in BTC price. The likelihood of this trend continuing is quite high.
On the other hand, active Bitcoin addresses have reached their highest levels in the last five months. This increases the likelihood of BTC returning to its 2023 high of $31,000.
Martinez also notes that bull markets are often associated with increasing on-chain activity: Popular crypto analyst Ali Martinez points out that this becomes evident when the monthly average of new wallets (shown in red) surpasses the yearly average (shown in blue). This indicates strengthened network fundamentals and increased usage. Even if BTC prices remain stable, on-chain activity is increasing, suggesting the potential for a resurgence in the BTC bull run.
Bitcoin’s Institutional Adoption and FOMC Impact
In recent months, major financial players have shown increased interest in Bitcoin. The world’s largest asset managers, BlackRock, Fidelity, and others, have applied for spot Bitcoin ETFs with the SEC.
Recently, Japanese banking giant Nomura aims to foster more Bitcoin adoption by introducing its own Bitcoin fund. Nomura’s Laser Digital Bitcoin Adoption Fund aims to provide institutional investors with cost-effective and secure access to Bitcoin.
For the fund’s asset security, Laser utilizes a regulated custody solution provided by Komainu. Komainu was established in 2018 through a collaboration between Nomura, Ledger, and Coinshares and plays a significant role in safeguarding these assets.
In Wednesday’s FOMC meeting, the Fed kept interest rates unchanged within the range of 5.25% to 5.50%, aligning with market expectations. However, this decision had minimal impact on the Bitcoin price and the overall crypto market.
Bitcoin’s Upcoming Price Action
Popular analyst Ali Martinez highlights a pattern emerging since mid-April; when the RSI reaches 73.31 on the 4-hour chart, it suggests a scenario where the Bitcoin price undergoes a correction.
Currently, BTC appears to be approaching a descending resistance trendline around $27,440. In the event of a correction, Bitcoin could potentially drop to $25,200 or lower, providing a potential opportunity for “buying the dip.” However, it’s important to watch for a 4-hour candle closing above $27,440, as it could signal a resurgence of the bull run.
