|
Getting your Trinity Audio player ready...
|
- Bitcoin shows signs of bottoming as funding rates turn positive.
- Gold outflows suggest investors are rotating into Bitcoin.
- Short traders face growing pressure amid potential market rebound.
Bitcoin (BTC) remains under selling pressure after its sharp October 11 decline, trading around $107,510 at press time. Yet, recent data suggests that sellers may be overextending their bets. Rising Funding Rates, strengthening bullish indicators, and a growing divergence between institutional and retail behavior could set the stage for a short squeeze in the coming days.
Market Data Hints at a Forming Bottom
According to Alphractal’s Buy-Sell Pressure index, Bitcoin is still in its green phase—typically a bullish zone—but edging closer to the red phase, where selling usually intensifies. Analyst Joao Wedson noted that this cycle appears “more restrained” than in 2017 or 2021, implying that a euphoric phase may still be ahead.
Interestingly, Bitcoin continues to outperform gold, with the BTC/Gold ratio up 8% in 24 hours, while gold just saw its steepest single-day fall in over a decade. This suggests investors are rotating capital from gold into Bitcoin, seeking better asymmetric upside.
VALR CEO Farzam Ehsani explained that this trend reflects shifting sentiment: “Investors taking risk off the table in one asset are likely to seek asymmetric upside in another—especially one still perceived as undervalued.”
Institutional and Retail Investors Diverge
Despite the bullish signals, institutional and retail investors are not aligned.
U.S. spot Bitcoin ETFs saw $101.3 million in outflows, while retail investors sold $165 million worth of BTC. This marks a temporary cooling phase after both groups were strong net buyers the previous day.
Meanwhile, CryptoQuant data shows Bitcoin’s Funding Rate turning positive again, rising to 0.0067%, suggesting derivatives traders are regaining optimism.
Short Squeeze Potential Builds
With open liquidations clustering below current prices, a short squeeze may be brewing. If BTC gains upward momentum, short traders could be forced to cover positions—potentially fueling a sharp rally.
Also Read: Bitcoin & Ethereum ETFs Surge as Institutional Investors Flood the Market
Ehsani remains optimistic about Bitcoin’s medium-term outlook, forecasting that BTC could reach $130,000–$132,000 by early 2026, assuming no major macro shocks intervene.
While uncertainty lingers, key indicators are shifting in Bitcoin’s favor. As funding rates turn positive and investors rotate from gold into BTC, the groundwork for a rebound—and possibly a short squeeze—is being laid.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
