Key Points
- Bitcoin’s Open Interest is increasing rapidly with a negative Funding Rate, indicating a surge in short bets.
- With high HODL sentiment and new addresses, a breakout above $96k could trigger a short squeeze in Bitcoin.
Bitcoin’s OI Rises Amid Short Bets
Bitcoin’s [BTC] Open Interest is on the rise, but this isn’t necessarily good news for the bulls. The Funding Rate has turned negative at -0.023%, suggesting that short bets are accumulating quickly.
On Binance, over 60% of traders are shorting BTC/USDT on the 4-hour chart. Longs, on the other hand, have taken a hit – nearly $1 million has been wiped out as traders took profits after BTC’s rise above $95k.
Bitcoin’s Possible Breakthrough
Since February, $96k has proven to be a tough barrier for Bitcoin to break. However, with the current number of shorts, a squeeze could potentially push Bitcoin through this barrier.
Earlier in the year, Bitcoin was caught in a repetitive cycle between $98,900 and $93,500 – every time it peaked above $95k, it was pushed back down. But now, the circumstances are different.
Bitcoin’s climb to $95k follows a stronger rally, breaking through old resistance zones. More holders are now in profit and are less likely to sell at the first sign of trouble.
The Realized HODL (RHODL) Ratio for Bitcoin has also hit a two-month high, indicating that the market is moving into accumulation mode – holders are keeping their coins, not rushing to sell.
Furthermore, approximately 30,000 new BTC addresses were created on the 23rd of April, right as Bitcoin was near $93,727. This suggests that everyone, both old and new investors, are accumulating, not selling.
Short Squeeze Possibility
At the time of writing, Bitcoin has slipped 0.39% below its $94,760 opening, and the voices advocating for a correction are growing louder.
However, if bulls maintain their momentum, a breakthrough above $96k is more than just a possibility. It could potentially trap the bears. With the Funding Rate (FR) deep in the red, bulls seem prepared to disrupt some short sellers.
In summary, a deep correction for Bitcoin seems rather unlikely at present. With a strong holding sentiment and shorts capitalizing on weak-hand exits, the stage could be set for a $96k breakout sooner than expected.
