Key Points
- Bitcoin experienced the largest short squeeze since 2022, leading to an increase in Open Interest volume.
- Despite a recent price drop, Bitcoin’s Open Interest continues to rise, suggesting more traders are betting on a price increase.
Bitcoin, also known as BTC, had a significant short squeeze recently, which was the largest since 2022.
This event led to a substantial increase in Open Interest volume.
Short Liquidation and Open Interest
A rise in Bitcoin’s price resulted in a massive liquidation of short positions. By the end of trading on 20th May, over $259 million in short positions were liquidated.
This event, known as a short squeeze, happens when an asset’s price rises sharply, forcing traders who had bet on a price drop to close their positions.
The recent short squeeze in Bitcoin led to an increase in its Open Interest volume.
Bitcoin’s Open Interest, as per Coinglass analysis, showed a significant recent cash inflow.
Current Outlook
Despite Bitcoin’s price falling below the $70,000 range in the last 24 hours, Open Interest has continued to rise.
This trend suggests more traders are still betting on another price increase.
At the time of writing, Bitcoin was trading at about $69,830, reflecting a decline of less than 1%.
However, Bitcoin has managed to rise above its short Moving Average and turned it into support around $66,000.
If this support holds, Bitcoin might soon test the $75,000 price zone.
