Market Analysis

Bitcoin Price Analysis Dec.8: After 10% Short Squeeze The Situation Is Still Bearish

from Crypto Potato 5 years ago 0 0 687

After capturing a new annual low, Bitcoin was consolidating for around 12 hours before reaching to lower areas and marking the $3200 zone as the new yearly low.

This was followed by a new record of the open short positions on Bitfinex. We mentioned it in our yesterday’s article, along with the possibility for a short squeeze.

As anticipated, not long afterward, a nice short squeeze had occurred sending Bitcoin for nice 10% gains, reaching a high of $3530 on Bitstamp (this resistance area include the top of the wedge formation, along with the 50 days moving average line).

As a reminder from yesterday:

“The hourly chart movement reveals a wedge pattern. $3300 is the bottom line of it. In the above correction, I can only assume Bitcoin will meet with the upper line of the wedge around $3500. “

In the following chart, you can get a little idea of an effect of a short squeeze – 2% of the open positions were forced to close in trade for 10% gain in just a couple of minutes. Imagine what will happen when 20% of the positions would get liquidated at once.