Caution Traders! Bitcoin Approaching $20,000, But it May be Yet Another Short-Term Bounce!
Bitcoin has been on a roller-coaster ride in the last 24 hours, nearly losing the $18,000 mark and now approaching the pivotal $20,000 level. While market participants believe the bullish Uptober rally will continue, the possibility of a bull trap haunts the price rally, mainly because some metrics have been showing levels that are typical.
As a result, it is now possible to predict that the price of BTC may sharply decline after a brief uptick.
In an intriguing update, one of the crypto trading platforms, Skew, shared metrics comparing the Binance open interest and the price. As the BTC price surged, the shorts were equally blown up. Hence, responding to the post, one of the well-known analysts, Capo, who has been bearish on Bitcoin for quite a long time, confirms a short squeeze.
Which confirms the short squeeze.— il Capo Of Crypto (@CryptoCapo_) October 14, 2022
Despite the sharp upswing in the BTC price, the asset remains squeezed at the same levels, as the Bollinger bands continue to squeeze tighter. Therefore, indicating that a notable move is yet to come ahead.
As seen in the above chart, the Bollinger bands continue to squeeze ever since the beginning of the month. On the other hand, the Bollinger bandwidth (BBW) which offers an easy way to visualize consolidation has dropped extremely lower. This indicates that volatility is very low and hence may be due to sudden price action, regardless of the direction.
Collectively, Bitcoin’s (BTC) price appears to be bullish but may also carry the possibility of a short-term bounce, that may trap the bulls.Source