According to Bloomberg, Bitcoin extended a two-day rally after bearish traders were forced to cover positions. More than $3 billion in leveraged crypto shorts were liquidated. Open interest in perpetual futures stayed flat. That's the problem: new bullish bets haven't rushed in to replace the squeezed positions.
A short squeeze and a bull market look the same for about five minutes. When shorts get blown out, price rips. New leverage and fresh money have to follow, or the move runs out of fuel fast. Late buyers who chase $72,000 are betting on conviction that may not exist.
Traders treat every violent Bitcoin bounce as proof the next leg has arrived. Bad habit. When the headline evidence is bears getting blown out and open interest stays muted, you're watching a pain trade, not a clean bull signal. Anyone buying after $72,000 is taking a very different bet.
Filed to the Markets desk · Aug 20