Recent data indicates strong investor anticipation for Bitcoin’s price to climb beyond $90,000. This surge in bullish sentiment is driven by high open interest and growing long positions, fueled by an increasing Funding Rate signaling confidence in further gains. However, this optimism presents a challenge: if price momentum weakens while demand persists, it could trigger a ‘Long Squeeze,’ potentially leading to a sharp price drop below the $90k level where longs dominate. \n
Market conditions paint a complex picture. Open Interest has surged by over $1 billion in the past day, indicating new positions are being opened primarily for long-term holds, which is reflected in the positive Funding Rate and increasing Long demand. However, Bitcoin’s spot cumulative volume delta remains within negative territory, suggesting waning buying pressure from market buyers. This creates an opportunity for speculative investors to sell and capitalize on profits, potentially leading to a ‘Long Squeeze.’ \n
Alphractal suggests a Long Squeeze is likely in the near future, driven by this prevailing anxiety in the market. If true, it could lead to a sharp drop in price, potentially even dipping below $90k where long positions dominate. \n
However, there may be positive indicators on the horizon. The short-term holder (STH) realized profit/loss ratio has risen to +1.2%, a significant shift that historically precedes sustained market recovery. This increase in profitability among STHs represents a potential counterforce against a price decline, as they are less likely to sell at a loss and act as a stabilizing force. \n
Therefore, for Bitcoin’s price to avoid a long squeeze, it needs to regain the $95k mark and then attempt to reach $96k. If this crucial milestone is achieved, it could alleviate market anxiety and prevent a downward spiral.