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Bitcoin Bulls Might Trigger a Short-Squeeze Based on the $3K Intraday Gain

After nosediving below the psychological level of $30K on July 20, Bitcoin (BTC) gained momentum and rose to the $32,100 level during intraday trading.

This momentum was partly triggered by Elon Musk’s disclosure during the B-Word virtual event held on July 21 that SpaceX aerospace manufacturer had invested its treasury reserves in BTC and Tesla was likely to begin accepting BTC payment again.

As a result, Bitcoin’s price has risen by $3K from lows of $29K to the current $32K level.

On-chain data provider Dilution-proof acknowledged:

“Bitcoin just had a +$3k intraday move, but the futures markets remain short. This will likely go down as a great setup for a short-squeeze by the bulls, or as an important bear clampdown of a relief rally. Either way, looks like we’ll be seeing some volatility over the next week.”

A short-squeeze is an unusual condition that triggers rapidly rising prices in a tradable asset.

The CIO at Moskovski Capital, Lex Moskovski, echoed these sentiments. He explained:

“Bitcoin is going to burn bears with a nice short squeeze at some point. Their only bastion of hope is the Fed tapering out.”

BTC whales have been buying the fear

According to on-chain analyst Will Clemente:

“Whales have been buying the fear. They’ve now added +96,044 BTC to their holdings in the last 3 weeks.”

Fear, uncertainty, and doubt (FUD) have engulfed the Bitcoin market ever since the leading cryptocurrency plummeted from an all-time high (ATH) price of $64.8k recorded in mid-April. This has been partly caused by intensified crypto mining crackdown by Chinese authorities and previous Elon Musk comments about Bitcoin’s environmental effects.

Market analyst Michael van de Poppe believes that all is good as long as Bitcoin sustains above $31k. Therefore, time will tell whether the short-squeeze will be triggered in the BTC market.

Bitcoin Needs to Flip the $47K Area for Support before Witnessing a Surge to $50K

Bitcoin (BTC) has stagnated between the $45K and $47K range for a couple of days based on significant resistance in this area.

The leading cryptocurrency was down by 1.14% in the last 24 hours to hit $46,580 during intraday trading, according to CoinMarketCap.

Market analyst Michael van de Poppe believes that Bitcoin needs to flip the $47K area to support its $50K journey to be accomplished.

BTC faces considerable resistance in the $47K area and the top cryptocurrency needs to flip this level to support and this will prompt a run to the psychological price of $50,000.

Michael van de Poppe had previously stated that Bitcoin looked a bit over-exhausted in this region based on the heavy resistance witnessed.

On-chain metrics provider Santiment recently acknowledged that Bitcoin had settled in the $45-$48K range and this triggered FOMO (fear of missing out) among traders as they anticipated another run towards April’s record-high of $64.8K.

As a result, crowd sentiment towards BTC turned more positive than usual.

Bitcoin miner’s capitulation accomplished

According to on-chain analyst Willy Woo:

“Miner’s capitulation complete. Bullish.”

The analyst pointed out that this was a bullish sign given that Bitcoin’s hash rate recently nosedived by 50% amid intensified crackdowns on crypto mining by Chinese authorities.

The function of hash rate mainly measures the processing power of the BTC network. It allows computers to process and solve problems that would enable transactions to be approved and confirmed across the network.

The rebound in hash rate was boosted by Bitcoin mining shifting from the East to the West, while the U.S. is emerging as the biggest beneficiary.

Long-term BTC holders created the floor

Crypto analyst Will Clemente stated that long-term BTC holders were instrumental in creating the floor in the BTC market compared to their short-term counterparts.

As a result, this prompted the latest surge in the Bitcoin market.

Long-term holders have emerged to be significant players in the BTC ecosystem. For instance, they have been setting the accumulation ball rolling by purchasing more Bitcoin as their holdings recently surged to 66% of BTC supply.

Bitcoin Inflows to Exchanges on the Rise, Which Could Signal a Bearish Momentum

Bitcoin (BTC) was down by 4.51% in the last 24 hours to hit $47,407 during intraday trading, according to CoinMarketCap. The leading cryptocurrency had pulled back to this level after breaching the psychological price of $50K on August 23.

The market analyst explained this could partly be triggered by an increase in BTC inflows to crypto exchanges, as acknowledged by Lark Davis:

“Bitcoin inflows to exchanges are on the rise; this often comes before a price dip. So far, the market is absorbing the selling pressure with price only down a few percent.”

Whenever exchanges experience high inflows, this is usually bearish because coins are moved from cold storage and digital wallets with the primary objective of being liquidated. As a result, sell pressure rises, causing the price to decrease.

Will Clemente echoed these sentiments. The on-chain analyst noted:

“I am short-term bearish. A drop in the Illiquid Supply Ratio and coins moving onto exchanges. Also, some whales are selling.”

Crypto trader Michael van de Poppe recently acknowledged that Bitcoin had to break the $51,000 level if an upward momentum was to continue, failure to which a pullback to the $44-$48K level would be witnessed.

Dormant Bitcoin is getting activated

According to crypto analytic firm Glassnode:

“The amount of Bitcoin supply last active 1y-2y (1d MA) just reached a 1-month high of 1,687,319.106 BTC.”

This also signals that more BTC is being moved to crypto exchanges to be activated because these coins are no longer being held in cold storage.

Meanwhile, major companies like Fidelity Investments and BlackRock have taken up large stakes in publicly traded Bitcoin mining firms.

On the other hand, the global crypto market is expected to hit $4.94 billion by 2030. The primary drivers have increased remittances by foreign countries and the need for transparency in the payment system.