Opinion: Market ripe for a new wave of short squeezes

Over the past 24 hours, open interest (OI) in Bitcoin futures has risen significantly, creating conditions for further upside in the price of digital gold. These observations were shared by trader CredibleCrypto.

Yup there was a significant rise in OI overnight- it seems to be more of the same- shorts aping into passive bids here at the local lows.

We have a big rise in OI, perp takers net selling, funding decreasing, and limit bids being filled. A recipe for a nice squeeze up. https://t.co/IgwSR5dIo9 pic.twitter.com/F82fmNnw7F

— CrediBULL Crypto (@CredibleCrypto) November 7, 2023

“We have a big rise in OI, net selling in perpetual contracts, a decrease in funding costs, and limit buy orders being filled. A recipe for a nice squeeze up,” he explained.

According to CoinGlass, open interest in Bitcoin futures достиг $16,6 млрд.

A jump above $35 000 on the eve could have triggered a wave of short-position liquidations.

This development had been anticipated by trader Skew and other members of the community. In the expert’s view, the catalyst was the break above $34 800.

$BTC
open interest still building up & looking more like shorts have a higher float in the OI build up here

$34,800 ~ key price for a squeeze pic.twitter.com/CbktjjU4Hv

— Skew Δ (@52kskew) November 7, 2023

Trader Daan Crypto Trades обратил внимание на «интересный сдвиг» в структуре рынка деривативов — на Binance большинство настроено по-медвежьи, тогда как на Bybit клиенты открывают больше длинных позиций.

«Будет очень интересно посмотреть, как это разрешится», — заключил он.

Analysts at Bitfinex explained that bitcoin’s hold near $35 000 was driven by expectations of a softer Federal Reserve policy.

Analysts at CoinShares also concluded similarly. They estimate that inflows into cryptocurrency investment products from 28 October to 3 November amounted to $261 млн after a record $326 million in the week prior.