Is a Bitcoin Short Squeeze on the Horizon?
CryptoNewsTerminal Staff06 Aug, 2024
Is a Bitcoin Short Squeeze on the Horizon?
Coinbase Institutional’s head of crypto research, David Duong, believes there's a chance for a Bitcoin short squeeze following yesterday's market sell-off. "Yesterday's crypto bloodbath caused increased buying on centralized exchanges today," Duong said. "This should lead to a relief rally in the coming days." However, Duong also noted that Bitcoin perpetual futures funding rates have been negative for the last 24 hours, indicating that there is still a lot of demand to short the cryptocurrency. "This means that the market is still bearish," Duong said. "But if the buying pressure continues, we could see a short squeeze." A short squeeze occurs when a large number of short sellers are forced to buy back their positions, driving the price of the underlying asset higher. If a short squeeze does occur, it could lead to a significant rally in the price of Bitcoin. However, it is also important to note that short squeezes can be volatile and can quickly reverse course.
