Cryptocurrencies have returned to the uptrend after a 10-day general correction in the crypto world. Bitcoin and Ethereum are leading the recovery. Moreover, according to crypto analyst Vinicius Barbosa, there is currently ‘short squeeze’ potential in the derivatives market.
‘Short squeeze’ game in the cryptocurrency market!
cryptokoin.comAs you follow from , a downward trend prevailed in the market last week. Interestingly, this prompted traders to open short positions against the leaders. Therefore, Bitcoin and Ethereum currently have meaningful accumulation for future liquidations at higher prices.
This is because short sellers agree on a liquidation price when opening these positions. If the price of the underlying asset rises to these marks, traders’ positions are forcibly closed, their collateral is converted into cash. Additionally, the asset is repurchased at the liquidation price. Hence, we know this phenomenon as ‘short squeeze’. This could potentially cause cryptocurrencies to skyrocket.
The leading cryptocurrency has the potential to skyrocket to $75,000!
In this context, the Bitcoin liquidation heat map is starting to show relevant liquidity pools above the $74,000 region. If short positions are liquid, it is possible for BTC to rise rapidly and reach $75,000. Such a bull run would hypothetically result in a 7% gain from the leading cryptocurrency’s current price, just under $70,000.
However, the heat map shows that these liquidity pools could grow even larger before the ‘short squeeze’ occurs. In this context, Bitcoin is likely to see lower levels first. It is possible that this will encourage investors to open more short positions for a bigger reward. Bitcoin’s halving event on April 20 is likely to trigger the first liquidations with a sudden price increase.
Short squeeze warning for Ethereum (ETH)
On the other hand, Ethereum has proportionally higher liquidity pools on the monthly time frame. Therefore, its native token ETH is an even stronger candidate for a ‘short squeeze’ in early April. The ultimate target for the second-largest cryptocurrency is around $4,150. This implies a potential upside of 17% from just above $3,550 as of press time.
In particular, BlackRock’s interest in launching a tokenization fund on Ethereum could fuel this move for the token. However, it is possible that market makers may decide to keep ETH at these levels to increase their profits in a future short squeeze. In summary, there is a possibility of a ‘short squeeze’ in April for both Bitcoin and Ethereum. According to available data, it is possible for the ‘short squeeze’ to reward investors with gains of 7% and 17% respectively. However, the cryptocurrency market is uncertain. Therefore, it is possible that other factors come into play for short-term losses.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. cryptokoin.com We strongly recommend that you do your own research before investing.
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