Bitcoin achieves highest position in 4 months..."Short squeeze will erupt soon"

▲ Bull market/ChatGPT generated image

Bitcoin (BTC) has recorded its highest position index in four months, accumulating strong upward price energy based on new capital inflow and expanded leverage.

According to crypto media outlet Cryptopotato on April 23 (local time), Bitcoin's position index recorded 40.1, and its 30-day simple moving average rose to 4.5, reaching a four-month high. Concurrently, open interest in the futures market surged by 14.5% over the past 30 days, marking the strongest figure in the last 120 days. Virtual asset analyst Axel Adler Jr. analyzed that these indicators suggest market participants' risk-taking propensity is strengthening and new leveraged positions are continuously being added.

The position index, a comprehensive signal combining directional taker inflows, open interest dynamics, and funding rates, showed repeated short-term surges over the past month. The steady rise of the 30-day moving average from around 0.4 at the end of March to 4.5 currently indicates that the market is forming a stable position structure beyond temporary shocks. Compared to February, when Bitcoin fell below $63,000 and this indicator dropped to minus 10.9, a rebound of more than 15 points proves that overall investor sentiment has entered a full recovery phase.

The double-digit growth in open interest supports that the current price increase is not a temporary phenomenon caused by a short squeeze (buying pressure that occurs to liquidate or cover short positions) but by actual new capital inflow. Analyst Adler explained, "The simultaneous rise in position indicators and increase in open interest can be interpreted as a sign of new accumulation of risk assets." Data showing positive changes in open interest for 23 out of the recent 30 days indicates that market activity utilizing leverage has become very active.

A distinguishing feature of the current indicator is that it is accompanied by confirmation from open interest, unlike the temporary surge observed in January. In January, the position index exceeded 20 and 30, but it quickly reversed due to a lack of support from open interest. In contrast, the current structure shows a cooperative movement where the gentle upward curve of the indicator and new capital inflow are in harmony. Bitcoin surpassed $78,000 on Wednesday, reaching an 11-week high, and the market's upward pressure remains valid.

However, a cautious view also suggests that if the change in open interest turns negative, indicating signs of deleveraging, or if the moving average falls below 0, the current bullish signal could weaken. Until such conditions occur, the prevailing analysis is that the market is actively building new positions based on an improved position structure and rising leverage. The Bitcoin ecosystem is attempting to enter an additional price appreciation phase based on a strengthened supply and demand foundation.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*