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Bitcoin has been experiencing an extraordinary price surge over the past two weeks, surprising many traders and investors. This remarkable momentum saw Bitcoin breaking above the psychological $65,000 price level once again. According to recent price data, Bitcoin traded as low as $52,820 on September 6.
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Its recent rebound to $66,300 signifies a substantial recovery of 25.5% in just two weeks. Data from Coinglass indicates that this is the largest gain Bitcoin has recorded in September since 2013. Despite this impressive rally, a significant number of traders continue to bet against Bitcoin. This ongoing trend has set the stage for a potential short squeeze, which could propel Bitcoin’s price to new all-time highs in October. Let’s delve deeper into this phenomenon and explore what might happen next.
Short Positions Dominate Exchange
According to crypto analyst Ali Martinez, who shared his insights on social media platform X, an astonishing 57.77% of Binance users with open positions are shorting Bitcoin. This means that a considerable number of traders are betting that Bitcoin’s price will decline, even as it exhibits strong upward momentum.
57.77% of @binance users with open positions are shorting #Bitcoin! pic.twitter.com/bWQ4d5n6MJ
— Ali (@ali_charts) September 27, 2024
However, considering the institutional and whale inflow into Bitcoin, especially through Spot Bitcoin ETFs, Bitcoin is likely to continue its upward trend in the coming weeks. The combination of these inflows and the significant volume of short positions creates the potential for a short squeeze as we move into October.
BTCUSD is now trading at $65,690.
As September draws to a close, many traders are looking forward to October, which is historically a bullish month for BTC (often referred to as “Uptober”). Bitcoin has typically performed well in the fourth quarter, which is when the market usually sees increased buying pressure and institutional inflows. Such a short squeeze could further push Bitcoin’s price beyond its previous all-time high of $73,737, leading to new price territories.
Bitcoin: Short-Term Correction On The Horizon?
While the outlook for Bitcoin is generally bullish, there is also the possibility of a short-term correction in the price over the coming days. The TD Sequential indicator, a popular tool used by traders to identify potential price reversals, has flashed a sell signal on the 4-hour chart. This phenomenon was noted by Ali Martinez, suggesting that Bitcoin could experience a brief pullback before resuming its upward trajectory.
Such a correction would serve as a consolidation phase after two weeks of bullish price action, allowing the market time to reset before the next significant move. Following this trend, it could potentially trigger more traders to go short, further fueling the potential for a larger short squeeze when Bitcoin rebounds.
At the time of writing, Bitcoin is trading at $65,658.
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Stay tuned for more insights and updates on Bitcoin’s price movements and market trends. As the cryptocurrency market continues to evolve, understanding these dynamics is crucial for making informed trading decisions.
