Bitcoin (BTC) headed toward $29,000 on April 26 after overnight gains marked a solid rebound.
Bitcoin short squeeze risk on the rise
The pair had begun its comeback after the April 25 Wall Street open amid fresh concerns over United States bank stability.
These came as First Republic Bank reported a dramatic fall in deposits, its share price tanking 50% on the day.
A familiar catalyst for crypto markets, the banking crisis reminded investors that it had gone nowhere since March, with crypto sources already predicting its next chapter.
When this bank bites the dust, probably later this week, we will be closer to the mrkt realising the entire US banking deposit base is de-facto gteed by the USG.— Arthur Hayes (@CryptoHayes) April 26, 2023
Massively Inflationary, that is why $XAU and $BTC are rising on news that FRC is a dead bank walking. https://t.co/LjSgjT5AJt
Eyeing the ongoing Bitcoin reaction, trading suite Decentrader warned that the market was still heavily short BTC, indicating a lack of trust in the uptrend’s durability.
“We’ve got Open Interest increasing and Funding Rate dropping which shows that a lot of people are shorting this move,” it told its Twitter followers in an update.
Popular trader Crypto Tony was among the skeptics, revealing a hands-off approach and a target of around $28,900 to go short.
$BTC / $USD - Update— Crypto Tony (@CryptoTony__) April 26, 2023
Currently out of the Bitcoin trade, so am looking for another setup to reposition
I am looking for us to tap that high and close back below (Deviate) .. This would b a solid trigger for a short entry pic.twitter.com/my4nDM4i7c
Trading resource IncomeSharks also considered a short opportunity to come next.
“BBands getting tight, looks like we are probably [due] for a little explosive move to the upside,” a tweet read on the day, referring to Bollinger Bands volatility indicator cues.
“Hit the 4h supertrend resistance, then I’ll look to flip for a short to catch the downside if it looks weak.”
BTC traders eye short opportunities near $29,000
While the negative funding rates in turn facilitated the potential for a “short squeeze” to liquidate bears, Decentrader added, data from monitoring resource Coinglass showed no extreme liquidation events for April 26 at the time of writing.
“Expecting a minor dip into the area we just broke, before continuing higher. The 4h candles may look scary, but I’m not worried. 30k remains the target for this trade.”
Adopting a long-term perspective, financial information resource Stockmoney Lizards also remained bullish.
“Bitcoin chart is easy to read. Very repetitive,” it argued about the 5-day BTC/USD timeframe.
“Bear market ended in 2022. BTC will continue to trend up (with minor pullbacks).”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.