A closely followed crypto strategist believes that overleveraged Bitcoin (BTC) bears are about to get wiped out.
The anonymous host of the YouTube channel InvestAnswers says he sees a short squeeze coming for BTC.
A short squeeze happens when traders who borrow an asset at a certain price in hopes of selling it for lower to pocket the difference are forced to buy back the assets they borrowed as momentum moves against them, triggering further rallies.
According to the analyst, Bitcoin bears are heavily shorting BTC, loading the market with fuel for potential rallies.
“The big story here is perpetual swap funding rates, averaged at negative levels over the past week, while open interest has sharply increased. This suggests aggressive shorting, structurally creating a setup for a ripe short squeeze.
These are the funding rates and I encourage you to focus your eyes on the bottom with the red dips.”
The analyst notes that historically, it has been an opportune time to accumulate Bitcoin when funding rates are low and negative.
The analyst adds that crypto market sentiment is currently hovering at fear levels, giving him another reason to be bullish on BTC.
“The Fear and Greed Index is at 26 and one point off my kill mark at 25.”
At time of writing, Bitcoin is trading for $63,990, a fractional decrease on the day.
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