Bitcoin's 15% price increase from November 21 to December 9 was primarily driven by short covering rather than new bullish demand, according to data from Velo and CoinGecko. During this period, open interest declined, and volume delta remained flat, indicating limited new buying activity. Deribit's 25-delta options skew improved from -11% to -5%, suggesting a potential market bottom.
CoinGlass data reveals that over $1.80 billion in short positions could face liquidation if Bitcoin surpasses $91,300. While a short squeeze might support a price recovery, sustained gains will require stronger spot market demand. Traders focusing on event-driven strategies are advised to carefully evaluate the risk-to-reward ratio before initiating long positions.
Bitcoin's Recent Rally Attributed to Short Covering, Not New Demand
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