Short squeeze alert: Two cryptocurrencies that could soar
Bitcoin (BTC) lost over 15% of its value from January 11 highs to its lows on January 12. This sudden price shift caused a bearish sentiment to surge, encouraging traders to bet against the leading cryptocurrency. In this context, Bitcoin could be on the verge of seeing a short squeeze , making its price soar. Not only did Bitcoin suffer from that, but other cryptocurrencies also experienced sell-offs and more short positions against them. For example, Ethereum (ETH) lost nearly 10% from its highest price on January 11 to its lowest the next day. Interestingly, traders create liquidity pools upward by opening a short position, which can become market makers’ targets. If the cryptocurrency reaches these liquidity pools, the positions are closed or liquidated, skyrocketing the price further. This is what is called a short squeeze . Finbold turned to CoinGlass ’s liquidation heatmaps on January 16 to understand the risks of a short- squeeze event. Bitcoin (BTC) could reach $50,000 ...