After a record-breaking recovery rally, traders are not convinced that the recent profits of the S&P 500 are sustainable and have built in the last ten years, the largest net-Short Futures Position.
Due to the ongoing correlation between Bitcoin and the stock market could contribute to a massive Short Squeeze in the S&P 500 Index, is that Bitcoin can break out at $10,000 at last of the resistance.
2020 – a roller coaster ride for the financial markets
At the beginning of the year is 2020, the Bitcoin to rally in addition to other well-known crypto-currencies like Ethereum, Chainlink and Tezos. The upward momentum at the start of the new year helped Bitcoin to a resistance at $ 10,000.
Meanwhile, most major global stock market indexes set records for their highest ever traded courses.
In the same way as the milestones were set on the shares – and crypto-market, caused the fear of a then-unknown pandemic, which began just, for panic among investors. The pushed suddenly into an insane Liquidation of as many assets as possible.
The stock market crashed from an all-time high on the record-breaking worst quarter of the completion of the story. Bitcoin and the Rest of the high-risk crypto market crashed along with the S&P 500, the Dow and other major US indices.
The two plants also recovered side by side and felt the sudden and unusual correlation to be maintained. Now that we have established the Short positions to the largest net-Short Position on S&P 500 Futures in the last nine years, this could help Bitcoin in the end, Once and for all from its bear trend to come out.
Epic Short Squeeze in the stock market could help BTC, $10K to break through
Like most crypto-traders is at this time well-known, is a contrary movement, probably, if the Short positions tend to be overwhelmingly to one side or the other, since the in the entire market, “maximum pain” caused.
Net-Short positions in S&P 500 Futures have reached the highest level in the last nine years.
Since the net Short positions, the Long positions in S&P 500 is dominated by Futures as strong, is a strong Short Squeeze is possible.
A Short Squeeze is a strong upward trend, which is intentionally designed in such a way that he’s forcing Short positions to cover, and the price of an asset more in the height drives. Often, if the assets remain below the resistance, it will be the cascade effect of Shorts, the cover, and not hit, driving the price through the resistance to the top.
A Short position in the S&P 500 from here could help him to trade closer to or perhaps even above its previous all-time high. And if the correlation between the S&P 500 is to continue, could contribute to a Short Squeeze in the stock market, the Bitcoin price finally breaks Once and for all, the $10,000 mark.
S&P 500 On A Monthly Basis | Source: Tradingview.com
Such a scenario, however, is based on a short bottleneck can occur or not. The last cases in which Short positions have reached such highs, led to a year-long consolidation phase before the next move higher.
The Short positions remained throughout the duration of each 12-month long period in SPX Futures on similar levels. If history repeats itself, starts the downward movement in the stock market, and instead of helping Bitcoin more, could stop the S&P 500 correlation to the bull market of the crypto currency for a while.