Bitcoin has risen from $62,900 to $79,500 in recent trading, a 26% gain over five days, according to Forbes as cited by ChainCatcher. The move followed the liquidation of more than $3.1 billion in short positions.
Trader says rally shows signs of a short squeeze
Trader MARMOT said the advance was not driven entirely by organic demand and instead looked like a classic short squeeze. He said roughly $3.1 billion in short positions had been liquidated over the past several days, making it one of the largest liquidation events he has seen.
As Bitcoin moved higher at speed, retail investors also began chasing the rally, with clear FOMO showing up in the market.
Standard Chartered sees upside beyond its $100,000 year-end call
Geoff Kendrick, head of digital assets research at Standard Chartered, said his earlier forecast for Bitcoin to reach $100,000 by year-end may have been too low. He said Bitcoin could retest its $126,000 record high and expects the market recovery to pick up pace after Oct. 6.
Some traders warn the market may be overheating
Not everyone is calling for a straight-line move higher. Some market participants said the current rally carries short-term overheating risk. Trader David Goldstein said Bitcoin’s rise from $64,000 to near $80,000 was driven mainly by U.S. Treasury bond buyback signals and a short squeeze on a scale not seen in years.
In his view, $80,000 is the first major resistance level. He said the current move could top out in the $85,000 to $90,000 range, followed by either a pullback or a period of consolidation near $70,000 to $75,000.
Prediction market data and ETF flows turn stronger
Data from prediction platforms shows expectations for Bitcoin’s future price are heating up. At the same time, flows into U.S. spot Bitcoin ETFs have improved. Over the four trading days through Aug. 21, the products posted cumulative inflows of $1.62 billion, reversing the net outflow trend seen in the prior week.
Traders caution against chasing price
Even so, several traders warned investors against buying simply because prices are moving quickly. Crypto Kit said that only a week ago, the market was waiting for chances to buy at $45,000 to $50,000. After Bitcoin climbed to $77,000, investors suddenly became comfortable with current prices, a sign that FOMO in the market had risen sharply.