Markus Thielen at 10x Research sees the improving $BTC technical indicators as a sign of a potential short squeeze. This could lead to further price appreciation as investors who have shorted $BTC may buy it back to cover their positions.
Let’s unpack Thielen’s analysis and what it means for $BTC.
$BTC Rebounds From Recent Crash
Despite the 11.99% monthly drop triggered by the recent stock market crash, $BTC started to rebound from its quarterly low of $49K registered on August 5, now standing at $59K.
Thielen notes that $BTC’s Relative Strength Index (RSI), which helps identify overbought or oversold conditions, is ‘bottoming out.’ Currently, $BTC’s RSI is 61.13, down 8% since July 21.
Moreover, the increase in $BTC’s Open Interest (OI) (the number of active $BTC futures contracts) during the stock market turmoil in early August indicates ‘more short positioning.’
Now that $BTC is recovering, investors who shorted the token might hope to buy it back to cover their positions. Typically, this practice, known as the ‘short squeeze,’ increases the asset’s price due to buying pressure.
Political Winds Could Blow $BTC Higher
Beyond economic forces, Thielen highlights the important role of the upcoming US elections on $BTC’s price.
Thielen also believes that the market is poised for a significant shift and is awaiting the Federal Reserve’s decision on interest rate reductions. A rate cut announcement could ignite a stock market surge, potentially leading to a corresponding rise in $BTC’s price.
Meanwhile, Kamala Harris strives to secure the crypto community’s votes with her Crypto4Harris initiative. However, the Harris-Waltz administration will likely introduce stricter regulations for crypto businesses and traders.
Closing Remarks
Markus Theielen’s forecast for a potential $BTC short squeeze could help the token solidify its positive trend and break above the current resistance level.
However, it’s important to note that short squeezes can be volatile and unpredictable. If the market conditions change suddenly, the short squeeze could lose momentum, leading to a potential price correction.
References
- Bitcoin traders eye a tactical RALLY as US election polls shift (10x Research)
- Bitcoin (CoinmarketCap)
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Lora Pance Crypto & Tech Content Writer 
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