Bitcoin Braces for Short Squeeze as Open Interest Climbs
Bitcoin is experiencing pressure in the derivatives market. The open interest is up to approximately 272.5K contracts. The rates of funding became almost zero. Price fell below the 95,000, and this is a definite set-up: shorts are accumulating.
There are two results that tend to result out of this behavior. Shorts win and price breaks down. Or spot buyers retaliate and squeeze. At this point of time, there is a bearish sentiment, but the underlying macro story is different.
What the Chart Does Tell Us
Funding declined and traders took new short positions. The market structure exhibits little volatility with significant long liquidations. It is an indication that there is controlled shorting, rather than panic selling. The trading zone, which is between 92k-95k, serves as a battleground. A bounce off this can be a good correction to the overenthusiastic short sellers.
Macro Factors
The world is awash with liquidity. Japan has turned on the stimulus of ¥17 trillion, more than previously expected. China used 800 billion yuan through reverse repos. U.S. terminated its shutdown last week and it plans to pause QT on December 1. Such actions generate risk assets such as Bitcoin. They tend to drive capital into crypto particularly during periods of high derivatives leverage over spot demand.
Short Squeeze Risk is Real
History tells a clear story. At the middle of 2024, a comparable open interest and funding structure resulted in a 15% rally in a week. When spot buyers came in, shorts overstayed and were squeezed out. Should price be above $92K and spot acquisition rises, the Bitcoin may explode to above $100,000 in a brief spurt.
Bitcoin is at a juncture. Bears are building shorts on increasing open interest and depreciating funding. World liquidity is being observed by bulls waiting momentum. When price is operating in the support zone and the funding is negative, then a classic short squeeze may occur. The new directional levels are in the $92K-95K.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Bitcoin News Today: Bitcoin ETFs See $1.1B Outflow, While New Investments Flow Into XRP and Solana Funds
- U.S. Bitcoin ETFs lost $1.11B in three weeks, with BlackRock's IBIT and Grayscale's BTC leading outflows amid Bitcoin's six-month low at $95,200. - Analysts link redemptions to macroeconomic uncertainty and profit-taking after October's $126,000 rally, while Harvard tripled its IBIT holdings to $442.8M. - XRP and Solana ETFs attracted $255M in new capital, highlighting crypto diversification as Ethereum ETFs also faced $259M in single-day outflows. - Market debates Bitcoin's $94,000 support level amid th
Chainlink's Value Plummets Even as Ecosystem Surges by $26 Trillion
- Chainlink (LINK) plummeted to a 2.5-month low below $14.50, breaking critical support with 118% 24-hour volume spikes signaling institutional selling pressure. - A 360,000-token liquidation cascade and 27% unrealized loss in Chainlink Reserve holdings highlight market fragility despite $26T+ oracle-driven transaction value. - Institutional adoption via Stellar partnerships and tokenized bonds offsets short-term bearishness, yet RSI at 41.72 and 58.79% Bitcoin dominance signal ongoing altcoin weakness. -
Meme Coin Frenzy Sparked by Whale’s $19 Million Wager and Trump’s Support for Crypto
- A crypto whale injected $19.86 million into 22 meme coins in one hour, reflecting heightened speculative activity amid Trump-era crypto-friendly policies. - Trump-linked Bitcoin miner Hut 8 Corp reported 460% revenue growth, leveraging low-cost operations and 4,004 bitcoins ($400M value) to capitalize on market trends. - Canary Capital's MOG ETF filing triggered a 17% market cap surge for the meme token, highlighting institutional interest in community-driven crypto assets. - Analysts warn of regulatory
India’s Blockchain Strategy: National Tokenisation to Upgrade Financial Infrastructure
- India's economic advisor meets Polygon and Anq Finance to discuss tokenisation frameworks and sovereign digital assets for financial modernisation. - Proposed Asset Reserve Certificate (ARC) model uses government securities as collateral, aiming to create secure, sovereign-backed digital settlement units. - Discussions highlight tokenisation benefits like faster settlements and reduced risks, while stressing regulatory alignment with existing financial infrastructure. - Collaboration positions Polygon as
Trending news
MoreCrypto prices
More
