Bitcoin has seen immense volatility in the past few days. The coin is currently trading for $ 13,800 – above the lows of $ 13,200 on Monday, but below the daily highs of $ 14,100 and the weekend highs at the same level.
Bitcoin is up about 1.5% in the past 24 hours – and some analysts think that because of the futures market, BTC is poised to move higher.
An analyst has shared data that the cryptocurrency futures markets are clearly declining right now.
The problem, the analyst said, is that many of these shorts are bearish, while the funding rate is also negative.
This could lead to what is known as a short squeeze, which is driving Bitcoin high.
Futures data shows: Bitcoin could move even higher
Bitcoin has seen immense volatility in the days leading up to and during the US presidential election. The leading cryptocurrency is currently trading for $ 13,800, above Monday’s lows of $ 13,200 but below the daily highs at $ 14,100 and weekend highs at the same level.
Bitcoin has risen slightly over the past 24 hours, while volatility has left the cryptocurrency fluctuating between $ 13,000 and $ 14,000.
Analysts say Bitcoin is likely to continue to rise in the coming hours and days. A crypto asset analyst shared the chart below, according to which the futures markets of the crypto currency are clearly declining at the moment.
The problem, the analyst said, is that many of these shorts are in bearish while the funding rate is also negative. This greatly increases the chances of Bitcoin being subject to a short squeeze, which drives prices up quickly.
“In the meantime, Binance’s funding has been consistently negative for the past few days, and the L / S ratio has also decreased (more shorts). It looks to me like a pile of over-indebted shorts is under water. “
Chart of the price development of BTC in the last few weeks with analysis by the crypto trader Byzantine General (@ByzGen on Twitter). Source: Byzantine General: BTCUSD from TradingView.com
The funding rate is the fee with which long positions regularly pay short positions in order to maintain the future price of the spot market. Negative refinancing rates combined with rising prices increase the chance of a short squeeze.
Post-election uncertainty could spur correction
The election uncertainty could mean that this scenario does not come to fruition.
Several analysts have noted how uncertainty surrounding the US election due to different economic and financial policies could lead to movements in markets like the dollar and bitcoin.
For one thing, BTC has already risen by $ 400 from the election – but also crashed by $ 300.
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