Pro: Bitcoin’s rally could continue with a short squeeze
- Bitcoin has bounced from lows of $17,600, with the S&P 500 and Nasdaq also up on the day.
- GlobalBlock's Marcus Sotiriou says a short squeeze could push BTC above $23k in the short term.
- The BTC/USD pair currently changes hands around $21,560, up nearly 4% in 24 hours.
Bitcoin’s recovery since the crash to lows of $17,600 has seen it climb above $20,000. The rebound comes as stocks also see some sustained upside following a recent rout, with the S&P 500 and Nasdaq posting consecutive winning sessions.
But what next for Bitcoin given the widespread weakness in the market, and the fact that investors lost a staggering $7.3 billion in just three days of the sell-off last week?
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Bitcoin could rebound above $23k
According to Marcus Sotiriou, an analyst at the UK-based digital asset broker GlobalBlock, the key area to watch is currently near $21,300. He says this zone now represents a new resistance level that bulls will need to turn into support to help boost fresh upside moves.
He told Invezz in an emailed note:
If Bitcoin can overcome this level, then the next target of $23,500 could be reached as shorts get squeezed.”
He also added that the bounce from below $20k could continue given the futures funding market outlook. He pointed to the “futures funding starting to get negative on the way up, after being neutral yesterday,” as an indicator that BTC could see a short term relief.
He explained that most investors in the futures market are taking short positions even as Bitcoin’s price is rising. This is a scenario that could lead to a short squeeze – with BTC/USD rallying beyond the $23,500 level.
Crypto analyst Ali Martinez shared the below chart to suggest the market could indeed see a short squeeze.
Bitcoin currently trades around $21,560, nearly 4% up in the past 24 hours.