Bitcoin Spikes 5% on a Short Squeeze But $40,000 Still Possible
Bitcoin's price spiked on a short squeeze. If the price continues to rise, $40,000 is the next target.
Key Takeaways
- Bitcoin’s 5% surge fuels speculation of reaching $40,000.
- Unexpected price jump triggered by short squeeze.
- Possible downturn anticipated after the surge.
Bitcoin‘s recent 32% rally from the October 11 low of $26,545 to a peak of $35,000 on October 24 has drawn significant attention. However, concerns arose with subsequent sideways movement and a failed bullish attempt on November 2, casting doubt on the sustainability of this momentum.
Today’s sudden 5% surge, attributed to a short squeeze, has reignited market enthusiasm. It also prompted speculation on Bitcoin’s ability to maintain this trajectory and reach the coveted $40,000 mark.
This unexpected spike has sparked a speculative frenzy among analysts and investors eager to decipher market signals. Our latest analysis delves into the short squeeze triggering the surge, evaluates the prevailing market sentiment, and considers the likelihood of Bitcoin breaking past the $40,000 barrier.
Bitcoin’s Short Squeeze
According to Coinglass’s data , today’s price rise can be attributed to the derivatives market. As the chart below shows, several short-position liquidations occurred in an hour.
In the recent period, 31.3 million short positions were liquidated, contrasting with only 420,000 longs being liquidated. The open interest decreased from 96,000 to 90,000 and dipped slightly further in the subsequent trading hour.
Resultantly, the price of Bitcoin surged from $37,170 to $38,500, marking a 3.60% increase. Breaking out from its consolidation range amid its previous upward trend, it appears poised to initiate a new uptrend.
The question now: where is it going next?
BTC Price Analysis
The 4-hour Bitcoin chart depicts the recent trading range as a fourth wave within the broader bullish pattern that commenced on September 11, with Bitcoin reaching a low near $25,000.
Today’s bullish breakout from an ascending triangle formation suggests the onset of the fifth wave in this uptrend, with three sub-waves already in motion.
Bitcoin‘s recovery of 52% since its September low sets the stage for a potential push towards the $40,000 resistance zone, potentially concluding this rally. This surge might signal the culmination of the recovery that commenced on November 21 last year. And it may also potentially lead to Bitcoin’s first significant correction in this bull market cycle.
However, accurate forecasts of corrective targets require the market to establish the peak of this upward wave. Stay tuned for updates as we closely monitor Bitcoin’s trajectory and its broader market implications.
Disclaimer
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
