Leading cryptocurrency Bitcoin managed to rise above $50,000 in a short time. After this, an upward trend mostly prevailed in the cryptocurrency market. This level of greed encourages investors to open long positions en masse. According to crypto expert Vinicius Barbosa, this could also lead to a long squeeze soon.
Now the ‘long squeeze’ alarm has gone off!
Essentially, ‘long squeeze’ is the opposite of ‘short squeeze’. It occurs when long positions are liquidated quickly. When investors open long positions, liquidity pools are created that can become targets for downside whales and market makers. If the price drops suddenly and reaches these liquidity pools, bullish traders will be liquidated. Thus, they are forced to sell their positions. This reduces the price even further. For this reason, savvy investors often argue that we should trade against the general sentiment. Notably, CoinGlass data detected significant ‘long squeeze’ threats for the following days.
A ‘long squeeze’ warning came for the leading cryptocurrency this week!
Bitcoin, in particular, has accumulated large pools of liquidity at low prices as it recently reached $50,000. If the price starts to fall, each pool will likely become an attractive target. It is possible for this to trigger long liquidity and a ‘long squeeze’. Notably, the first level is located just below $48,000 on the weekly time frame. Losing this support will be the trigger for such a liquidation event. The largest liquidity pools remain at $46,600 and $44,600. Additionally, it expects a ‘margin call’ of approximately $700 million.
However, there is still some liquidity on the upside at the current price resistance at $50,500. This means BTC could see another short run towards this region before retreating to $44,000 in a ‘long squeeze’.
Solana (SOL) may fall below $100 this week!
Solana (SOL) is another candidate for a pullback due to the recent increase in long positions. cryptokoin.comAs you follow from , Solana has outperformed most of the market since 2023. Thus, it aroused the greed of crypto investors worldwide.
However, the heat map of Solana and other altcoins is not as loaded as Bitcoin’s. Therefore, they need BTC to crash in a ‘long squeeze’ before following their lead. SOL has liquidity pools at $107.40, $103.25, $100.70 and $96.40. All of these prices are possible targets in case of a pullback this week.
Bitcoin and Solana are trading at $49,900 and $113.70 at the time of writing. In a ‘long squeez’ under favorable conditions, both cryptocurrencies could drop to $44,000 and $96. Yet the crypto world is unpredictable and highly volatile. So it is possible for this scenario to change at any time. Positive news and developments may maintain the strength of these projects this week, increasing prices instead of decreasing them. Investors need to trade cautiously. Additionally, it would be beneficial for them to avoid taking extreme positions in any direction.
The opinions and predictions in the article belong to the expert and are definitely not investment advice. We strongly recommend that you do your own research before investing.
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