Bitcoin (BTC) has continued to exhibit its classic price volatility as it closed in on November 7, nearing $36,000 after a sudden “short squeeze” in the market. This surge in price came as a result of increased open interest (OI) on exchanges, creating a situation where shorts felt the heat and Bitcoin made swift gains, peaking just below $35,900.
Data from Cointelegraph Markets Pro and TradingView has tracked the reaction of BTC/USD to this increase in OI and the subsequent short squeeze. There had been concerns about the more than $15 billion in OI leading to additional volatility, with the direction of Bitcoin’s price remaining uncertain.
Popular trader Skew had predicted this event in advance, stating that momentum would increase quickly once the price returned to $34,800. This prediction ultimately came true as open interest continued to build up and shorts had a higher float in the OI, leading to the key price for a squeeze at $34,800.
On-chain monitoring resource Material Indicators had previously predicted that $36,000 would remain out of reach for Bitcoin, citing its proprietary trading indicators. This cautious outlook was met with skepticism by some traders, such as Daan Crypto Trades, who noted a shift in derivatives composition between Binance and Bybit. Bybit traders expressed more bullish sentiment compared to their counterparts on Binance, leading to interesting dynamics in the market.
Financial commentator Tedtalksmacro highlighted the impact of the short squeeze on Binance, noting that short open interest disappeared as a result of the squeeze. Despite this, Bitcoin’s price continued to hover around $35,300, with OI still beyond $15 billion according to data from on-chain monitoring resource CoinGlass.
The surge in Bitcoin’s price and the resulting short squeeze has demonstrated the underlying volatility in the cryptocurrency market. Traders and analysts will continue to closely monitor the open interest and price action of Bitcoin, as it remains a key driver of market sentiment and dynamics.
It is important to note that this article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research and exercise caution when making investment decisions.