On-Chain Data Suggests Price Rally on the Horizon
Renowned crypto analyst Samuel Carter believes that on-chain metrics indicate that Bitcoin (BTC) could be poised for a significant price squeeze.
Carter explains that a short squeeze occurs when traders who have sold Bitcoin short (i.e., bet on its price decreasing) are forced to buy it back due to a sudden price increase. This buying pressure can trigger a further rally, resulting in a sharp upward movement for Bitcoin.
“Current price action is largely influenced by demand from futures markets. Notably, this demand continues to rise, suggesting that we may be in the early stages of another price squeeze,” Carter says.
Caution Amidst Bullish Signals
While Carter’s analysis suggests a bullish outlook for Bitcoin, he cautions that not all metrics are entirely positive.
“Calendar demand, while elevated, is showing signs of overbought conditions. Monitoring basis – the cost of holding a long position – will be crucial. If basis wanes too rapidly, it could pull the rug under the current price action.”
Basis: A Measure of Investment Cost
Basis measures the cost of maintaining a long position in Bitcoin. It provides insight into the demand for futures contracts.
At the time of writing, Bitcoin is trading at $30,488. Despite a slight drop of 0.88% in the past 24 hours, it has experienced an overall gain of 1.2% over the past week.
Disclaimer: Opinions expressed in this article are for informational purposes only and should not be considered investment advice.
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