Bitcoin’s recent surge has seen its price exceed $90,000, spurring a significant increase in long positions among investors. As the cryptocurrency reached over $95,000, interest among traders soared, with many anticipating further price gains and a potential rise to $100,000. This growing demand for long positions was highlighted by a positive funding rate over the past 24 hours, indicating optimism among investors. However, this hopeful sentiment may be countered by a weakening price momentum.
Despite an increase in open interest—up by $1 billion within a day, reaching $32 billion—Bitcoin’s price has remained stagnant around $94,000 for the past couple of days. The spot cumulative volume delta (CVD) has also shown concerning signs, sitting at -1094, suggesting that buying pressure is declining amid rising open interest. A weakening demand underscores the potential for speculative traders to exit the market, heightening the risk of a long squeeze. Market analysis suggests that a long squeeze may be imminent, especially as bullish sentiment grows among many traders.
If the predicted squeeze occurs, it could lead to a significant drop in Bitcoin’s price, potentially falling below the $90,000 mark. The current market conditions warrant caution, particularly due to the rising funding rates alongside easing buying momentum. Yet, there is a glimmer of hope. The short-term holder realized profit/loss ratio has turned positive at +1.2%, indicating a shift in market dynamics.
When short-term holders are in profit, there tends to be less selling pressure, which can aid in stabilizing Bitcoin’s price. To avoid a downward spiral and potential long squeeze, it’s crucial for Bitcoin to reclaim the $95,000 threshold and attempt to approach $96,000.