A sharp rise of the Ethereum price did not lead to a short squeeze. So, what’s next to expect?

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A record increase of open long and short positions in the ETH/USD pair, which we noticed in advance, ended up with a sharp rise of prices on September 13–14. In two days quotes skyrocketed from a minimum at about $170 dollars to a maximum in the area of ​​$220.

Despite such a strong movement, it’s too early to talk about a real short squeeze, because closing of shorts by some part of the market participants was followed by another increase of short positions opened by other players. This becomes evident if you look at the dynamics of open positions on the Bitfinex exchange. After the decrease of shorts by 40 thousand, the number of open positions has very quickly recovered.

From a technical point of view, we observed a false breakdown of the support area of ETH/USD at $180–200 with a strong buy-back, which is a strong bullish signal. Often such false breakdowns develop into a medium-term trend.

However, the number of long positions continues to grow and has set a new historical record. As of mid-day on September 14, the ratio of longs and shorts remains at such a level that is dangerous for bulls.

A safer bet would be to open medium-long long positions only after we witness a retest of the area of $200 and consolidation above this psychologically important level of support.

Andrey Mastykin, cryptocurrencies analyst of the Telegram channel

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