Bitcoin remains range bound in lower timeframes trading at $54,277. The first cryptocurrency by market cap records almost no gains in the daily chart, but a massive 23.9% in the 7-day chart. The general sentiment in the market has flipped bullish, as investors seem to be waiting for further appreciation in Q4, 2021, a period that usually works for the bulls.
Investment firm QCP Capital believes that the recent surge in price is due to a “short squeeze” triggered by a high number of liquidations in short positions. They also point to the increase in open interest on the Chicago Mercantile Exchange (CME) and the premium for derivatives as evidence of institutional buying. Additionally, they note that the dissipation of uncertainty around Chinese real state company Evergrande and the approval of a BTC ETFs based on CME Futures are contributing factors.
However, QCP Capital also warns that there are potential obstacles that could prevent Bitcoin from reaching its previous highs, including high leverage in the crypto market and downside nervousness in the options market. They expect some short-term bearish price action for Bitcoin and note that the Tom Demark Sequential, a metric used to measure if a price move has been overextended to a certain direction