Popular crypto analyst Willy Woo thinks on-chain data suggests Bitcoin (BTC) could be in the early stages of a price squeeze.
Woo says a short squeeze, which happens when large numbers of traders who shorted an asset decide to cut their losses in response to an unexpected price bump, triggering additional rallies, could be in the works for BTC.
“Price action has largely been dominated by demand stemming from the calendar futures markets, the instrument of pros and institutions. Even now, demand keeps surging, suggesting we are in the early stages of another price squeeze.”
The trader tells his 1 million Twitter followers that not all Bitcoin metrics are looking completely bullish, however.
“And the flipside: Calendar demand is overbought under statistical analysis. It’ll be important to keep a close eye on basis waning. It could leave quite fast, rugging the bullish price action.
Explainer: Basis is the cost of maintaining an investment. In this case basis = the cost of maintaining a long position so can be used as a way to quantify demand coming from calendar futures.”
BTC is trading at $30,488 at time of writing. The top-ranked crypto asset by market cap is down 0.88% in the past 24 hours but up more than 1.2% in the past week.
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