Bitcoin's Surprise Recovery: Short Squeeze Pushes BTC Back to $86,259
1min read Bitcoin has staged a remarkable recovery, surging to $86,259, raising questions about its ability to maintain this level or if sellers will reassert their dominance. Over the past day, Bitcoin (BTC) has risen by 1.55%, marking a moderate recovery. However, sellers still dominate the market, and a short squeeze appears to have driven this temporary rebound.
Bitcoin's market dynamics have shifted dramatically, with sellers currently in control as the Cumulative Volume Delta (CVD) plunges to its most negative level. This intense selling pressure typically precedes further price declines. However, a short squeeze may be shifting momentum, leading to a surprise recovery that pushed BTC back to $86,259.
Over the past month, Bitcoin has experienced one of its worst performances in recent years, dropping by 17% in February. This decline saw BTC hit a 4-month low. However, this trend has reversed, with Bitcoin reclaiming $86,259 as of this writing. Despite this recovery on daily charts, sellers remain heavily active in the market, as evidenced by the declining cvd.
Bitcoin's spot Cumulative volume delta has declined to hit its most negative area. Such a significant drop implies that the market is executing more sell orders than buy orders, suggesting that more investors are selling their BTC. Historically, when sellers dominate the market, further price decline has preceded as Bitcoin struggles to find strong support. This decline resulted in more traders taking short positions as they expected prices to dip further.
However, the sudden demand for shorts seems to have resulted in the reverse effect, resulting in a short squeeze. While Bitcoin is experiencing higher sell orders, the markets are signaling a short-term recovery. This implies that while CVD has reached its highest negative value, it seems Bitcoin has experienced a short squeeze as demand for BTC among traders has gone short and surged, leading to the price recovery witnessed over the past day.
This sudden shift in sentiment arises from a rising demand for Futures. The surge in buy orders evidences the high demand for Futures as traders started going short. These buyers have entered the market and absorbed the high sell pressure arising from the negative CVD. As such, the Taker buy-sell ratio has turned positive for the first time over the past week. Additionally, Bitcoin's Fund market premium has turned positive, suggesting that the 