Analyst: Bitcoin Nears New Highs but Traders Remain Bearish, Surge in Short Positions May Trigger Potential Short Squeeze

According to ChainCatcher, Coindesk analyst Oliver Knight stated that although Bitcoin's trading price has surpassed $110,000 and is approaching its all-time high, traders are still exhibiting bearish sentiment. The long-short ratio has dropped significantly, falling from 1.223 (bullish dominance) to 0.858 (bearish dominance).

Data shows that short open interest has risen from $32 billion to $35 billion, indicating an increase in capital flowing into bearish positions and reflecting a lack of confidence in Bitcoin's continued rally. Currently, Bitcoin remains volatile within the $100,000 to $110,000 range. Technical indicators such as the RSI are showing bearish divergence, and traders are employing short-term strategies to arbitrage within this range.

With the increase in short positions, there is also a potential bullish scenario in the market: a short squeeze. If Bitcoin breaks through its all-time high, triggering forced liquidations and stop-loss levels for shorts, it could rapidly drive up buying pressure and push the price even higher.