- September 22, 2023
- Posted by: [email protected]
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The world’s largest cryptocurrency, Bitcoin (BTC), has been lingering around the $27,000 mark, accompanied by significant trader and network activity. On-chain data reveals a notable increase in short positions by traders, a trend that could trigger a short squeeze, potentially driving Shiba Inu’s price higher.
According to Santiment, an on-chain data provider, Bitcoin traders have adopted a notably bearish stance on platforms like Deribit and Binance. This heightened bearish sentiment increases the likelihood of potential liquidations, which, in turn, could exert upward pressure on Bitcoin’s price.
Bitcoin’s price has risen by 4% since the surge in short positions began last week. This trend has a good chance of continuing in the near future. On a positive note, Bitcoin’s active addresses have surged to their highest levels in five months. This surge in network activity bolsters the chances of Bitcoin’s price revisiting its 2023 high of $31,000.
According to Ali Martinez, a bull market frequently coincides with greater on-chain activity. This correlation becomes evident when the monthly average of new wallets exceeds the annual average, indicating strong network fundamentals and increased usage. Despite price stability, Bitcoin’s on-chain activity is increasing, indicating the potential resurgence of a BTC bull run.
In recent months, major financial institutions, including BlackRock and Fidelity, have displayed growing interest in Bitcoin. These giants have applied for a spot in the Bitcoin ETF with the US SEC, underscoring their commitment to cryptocurrency adoption. Japanese banking giant Nomura has also entered the fray, unveiling its Laser Digital Bitcoin Adoption Fund. This fund aims to facilitate institutional investors’ access to Bitcoin, offering a cost-effective and secure solution. Nomura has partnered with Komainu, a regulated custody solution provider, to safeguard the fund’s assets.
Despite this, the Federal Reserve’s decision to keep interest rates unchanged in the range of 5.25% to 5.50% during the FOMC meeting had minimal impact on Bitcoin’s price and the broader crypto market.
Analyst Ali Martinez has identified a recurring pattern since mid-April: whenever the Relative Strength Index (RSI) on the 4-hour chart reaches 73.31, Bitcoin’s price retraces. Currently, a similar scenario is unfolding as BTC approaches a descending resistance trendline at $27,440. In the event of a correction, Bitcoin could potentially dip to $25,200 or lower, presenting a potential buying opportunity for investors seeking to capitalize on the dip.
