[ETH] Open Eth Short Positions Indicate Potential Short Squeeze
Updated
The purple line is the ETHUSD price overlayed short volume in the last 9-10 months
Looking at ETHUSDSHORTS which shows the amount of Ether used for open short positions on Bitfinex has spiked enormously in the last couple days. This charts data, going back nearly a year, clearly show us that there is a huge amount of Ether that has been "artificially" taken out of the market in just the last few days, not to mention the last couple weeks.
Those Ether need to be brought back into the market whether the short sellers want to or not. Of course we know exactly how powerful the uncoiling of a short squeeze can be if we look at early April on Bitcoin charts.
There does need to be a catalyst that eventually breaks the camels back and triggers the buybacks of all those Ether. Could happen on just a small move upward setting off a chain reaction. Some fundamental news could drive bulls to trigger the squeeze also. Bullish stock market moves after a long weekend in the US could contribute to that tomorrow.
We could also see some more sideways or slow upwards grind in ETH price over the next few days which would most likely look very choppy and untradable in terms of TA as shorts slowly close out and eventually high volume liquidation prices trigger, sending price upwards.
Looking at ETHUSDSHORTS which shows the amount of Ether used for open short positions on Bitfinex has spiked enormously in the last couple days. This charts data, going back nearly a year, clearly show us that there is a huge amount of Ether that has been "artificially" taken out of the market in just the last few days, not to mention the last couple weeks.
Those Ether need to be brought back into the market whether the short sellers want to or not. Of course we know exactly how powerful the uncoiling of a short squeeze can be if we look at early April on Bitcoin charts.
There does need to be a catalyst that eventually breaks the camels back and triggers the buybacks of all those Ether. Could happen on just a small move upward setting off a chain reaction. Some fundamental news could drive bulls to trigger the squeeze also. Bullish stock market moves after a long weekend in the US could contribute to that tomorrow.
We could also see some more sideways or slow upwards grind in ETH price over the next few days which would most likely look very choppy and untradable in terms of TA as shorts slowly close out and eventually high volume liquidation prices trigger, sending price upwards.
Note
Curiously enough, the same chart for BTC shorts (price overlayed with light blue line) doesn't seem to match the ETHUSDSHORTS charts.
Meaning, and Ethereum short squeeze could be subdued if BTC price doesn't actively trend upwards at the same time and significant magnitude. However, you can clearly see here what that April short squeeze looked like.
If BTCUSD reverses here just above $7000, perhaps the ETHBTC ratio could see huge gains. An ETH short squeeze could contribute to a bullish feedback loop with BTC, at least long enough to cut down the open shorts on ETH.
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