A mostly bullish sentiment dominates the cryptocurrency market, following Bitcoin’s (BTC) run to above $50,000. This level of greed encourages traders to massively open long positions, which could soon lead to a long squeeze.
Essentially, a long squeeze is the opposite of a short squeeze, happening when long positions are liquidated in series. When traders open longs, it creates liquidity pools to the downside that can become targets for whales and market makers.
If the price suddenly drops, reaching these liquidity pools, bull traders are liquidated and forced to sell their positions, dropping the price even further. For this reason, savvy investors usually argue that we should trade in opposition to the overall sentiment.
Notably, Finbold retrieved data from CoinGlass on February 13, spotting meaningful long squeeze threats for the following days.
Long squeeze alert for Bitcoin (BTC) this week
In particular, Bitcoin has accumulated huge liquidity pools at lower prices due to its re
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