Cryptocurrency analysis company CryptoQuant has shared a remarkable assessment of Bitcoin’s recent rise.
The company argued that data flows, especially on the Binance exchange, indicate the possibility of a “short squeeze” (rapid price rise due to liquidation of short positions) in the market in the near future.
Bitcoin has gained nearly 8% this week to break above $95,000, but CryptoQuant noted that there are questions about whether this rally is the start of a long-term breakout or a classic bull trap.
According to the analysis, exchange flow data on Binance provides important clues.
Between April 6 and 10, Binance saw an inflow of more than 15,000 BTC, while the price remained sideways in the $85,000-$87,000 range. This is usually associated with short-term investors selling or transferring their BTC to the exchange due to tax payments.
However, the picture turned around between April 19-23. While there was an outflow of over 15,000 BTC from Binance, the Bitcoin price climbed above $93,000. This shows that investors are withdrawing their assets from the exchange and storing them in personal wallets, and the accumulation trend in the market is strengthening.
Related News
Will Ethereum’s (ETH) Fortune Turn Around? Analysis Company Shares Price Points That Must Be Protected and Surpassed
According to CryptoQuant data, there has been a significant decrease in BTC reserves on exchanges since April 18. This contributes to the decrease in selling pressure and the establishment of price increases on more solid foundations. In addition, the Exchange Whale Ratio falling below 0.3 on April 23 shows that the influence of large investors in the market has weakened and retail investors have become more decisive.
The company stated that high leveraged long positions in the $82,000-$88,000 range are liquid and “weak hands” are being cleared from the market. It is stated that there are still large short positions and that a short squeeze may occur if these levels are exceeded.
In this environment where the market structure is simplified and upward liquidity is weak; CryptoQuant predicts that trigger factors such as a possible ETF inflow, a change of direction by the FED or weakness in emerging markets could quickly carry Bitcoin to the $98,000 – $100,000 band.
*This is not investment advice.