Analysts say Bitcoin traders are avoiding substantial short positions.
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Prices have risen more than 21% since the beginning of this year. However, analysts have observed that the current Bitcoin short squeeze rate is lower than before.
In early January, the price of Bitcoin hovered around $42,000, but in February it surpassed $52,000 for the first time in 27 months. These sudden price spikes typically cause significant short-term pressure. However, this week’s Bitfinex Alpha report stated, “The scale of the short squeeze observed so far this year has been smaller than in previous years.”
“Large whale investors did not take significant short positions due to expectations that prices would continue to rise,” Bitfinex analysts added.
The Bitcoin short squeeze rate is lower than it has been in recent years. Image: Bitfinex/CryptoQuant.
Indicator of Bitcoin bull market situation
The Bitfinex Alpha report defined the current market situation as one of low supply and increased demand.
This report shows current Bitcoin holder dynamics that could indicate early bull market conditions. Citing Glassnode data, analysts said the total amount of supply lost to long-term Bitcoin holders is converging towards zero as the price of the digital asset rises. “Currently, less than 6% of the total long-term holder supply of individual companies is losing money. Historically, similar instances where groups of long-term holders have lost similar amounts of Bitcoin are indicative of nascent bull market conditions,” Bitfinex Alpha reports. added:
The largest digital asset by market capitalization was trading at $52,219 at 8:04 a.m. ET, according to The Block’s pricing page. The GM 30 index, which represents the top 30 cryptocurrencies, fell 0.09% to 114.14 over the past 24 hours.
Bitcoin price surpassed $52,000. Image: Block.
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