Bitcoin On The Brink Of A Massive Short Squeeze, Expert Warns
Bitcoin Advantage (BTC.D) soared to more than 64% this week, its highest level since March 2021, sparking debate over the coming brief squeeze that could cause its price to fall into the sky. The stark warning comes from HEAA’s growth head Joe Consorti, who on Monday outlined his view of the decisive turning point in Bitcoin and the decisive turning point in other digital asset markets.
Historic breakthroughs in Bitcoin-related models
In his postalConsorti believes that Bitcoin’s recent price action marks the first time in its 16-year history, with both its price and market advantages simultaneously increasing. Historically, Bitcoin’s dominance initially rose, only weakened as speculation poured into altcoins. However, Consorti noted: “This is the first time in history that Bitcoin’s share in the total digital asset market is rising, and its price is rising. Retail-driven speculation has increased the price of Bitcoin over the past cycle, The funds were then transferred to Altcoins, resulting in Bitcoin The dominance of decline. This dynamic disappeared. ”
According to Consorti, the days of wide Altcoin rally seem to be over with the initial surge in Bitcoin. Bitcoin’s advantage has recently hit 64% – the highest level since February 2021. Consorti attributes the phenomenon to significant changes in market participation: “This cycle, institutions, sovereignty and long-term holders are leading the charges, increasingly allocating capital to Bitcoin, although largely overlooking the rest of the market part.”
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The market turmoil last week led to what Consorti said was “ Single largest liquidation event In the history of “encryption”, cited data was wiped out more than $2.16 billion in 24 hours. Ethereum led the liquidation figures at $573 million, while the largest single liquidation ($25.6 million ETH/BTC order) lasted for binary. “As you may have guessed, the time at ETH/BTC is not pleasant,” Constori noted.
He believes that these liquidations highlight the unstable nature of the heavily leveraged altcoins market: “When Price is bad for them, all of this disappears immediately. This is not your standard technical correction, it marks the level of extinction of Altcoins The beginning of the event.”
“Altcoin Casino” in the Crisis
Consorti’s analysis shows that he believes “Altcoin Casino” is now crashing. He noted that the narrative surrounding popular projects failed – Etherum, Solana and defi in it – has been working hard to keep investors’ confidence: “altcoins survived purely narratively. Every cycle There are a number of new narratives that have the potential to change the world. None of them continues.”
He compared it to Bitcoin’s core value proposition, which he believes does not require marketing: “Bitcoin, on the other hand, does not require narrative. It does not require marketing or hype. It exists, and it thrives because it is Built to do one thing – protect wealth in a world of permanent currency expansion.”
Consorti also cites the “merger” of Ethereum and its so-called deflationary design, noting that the total supply of ETH has increased by 13,516 ETH since the upgrade, but is not enough to increase under the “ultra-low currency” claim.
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At the first press conference of the White House crypto task force, Consorti added policy dimensions to the transformation of the market, highlighting Sen. John Boozman’s statement: “Some digital assets are commodities, some are Securities.”
He believes this is an implicit admission that Bitcoin is different from other digital assets. In further development, Consorti quotes White House AI & Crypto comments David SacksThey mentioned that the group is evaluating the viability of strategic bitcoin reserves, a shift from the previous term “national digital asset inventory”.
Consorti sees it as a “major development”, which represents an increasing awareness of Bitcoin’s unique attributes: “This language shift is huge. A few years ago, the U.S. government was openly hostile to Bitcoin. Today, they are discussing in stock.”
Amid this turmoil, Consorti suggests that the next dramatic move in Bitcoin could be an explosive brief squeeze. He pointed out that the funding rate on permanent futures has been “deeply negative”, reminiscent of when Bitcoin will trade close to $23,000 in August 2023. This means a tendency towards traders, betting on Bitcoin, this position may be quickly relaxed: using flush rates to eliminate most long positions, the next major move may be the opposite, which is forced to be a brief liquidation The explosive gathering promoted. ”
If the market conflicts with these short sellers, forced buybacks may drive prices up at an unusual rate and quantity, especially if overall liquidity remains thin. He concluded, “Traders who overextended their leverage to short bitcoin will eventually have to buy it back when the price moves against them, just like overleveraged longs were wiped out last week. Short squeeze. The longer the dynamic of a short dominance, the greater the risk of forced shirt clearing cascades, which will make Bitcoin price higher.”
At press time, BTC.D was 61.19%.
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