The short squeeze is coming
The amount of shorts on Bitfinex approaches 40k. Looking back, the crowd rarely earns money that easy. When shorts are getting too obvious, the short squeeze happens. A big player needs to move the price a bit up to create a waterfall of margin calls and make the move much bigger. Since we have the record on BTCUSD shorts, I expect a significant bounce above 7000. My conservative bet is close to 7500. On the other hand, if we could pass the previous top at 8500, that could possibly mean the end of the bear market. I don't believe it will happen this time.
Note
The squeeze has started. The point is to push the price high enough to enforce first margin calls. If it succeeds, the number of shorts will rapidly decrease resulting in further price growth.Note
We crossed 7000. I keep my target around 7500 but what I want to see is the squeeze and shorts falling strongly below 30000. I may hold my position until it happens.Note
Many may think that the bounce topped. However, I believe that shorts are still too high for that. I wait until they are below 22-23k. I still believe in the higher top, so I keep my trade open.Note
Shorts briefly fell below 22k but then rose again. I stick to my original thesis: SHORTS NEED TO GET REKT. At the moment, shorts outnumber longs again so I don't believe this is the top. I'm keeping my position.Note
The indicator I watch is RSI on daily candles (still below 70). The perfect setup would be RSI above 70 (on daily) and BTCUSD longs outnumbering BTCUSD shorts, price level at least $7500.Note
A small update: I'm keeping my position. I believe that the recent dump wasn't speculative in nature and I still believe that shorts need to explode before the price will go significantly lower. Let's see how it will play out.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.