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Morgan Stanley: BTC may be forming a short squeeze, short covering driving price increase
Summary: Morgan Stanley's cryptocurrency strategy team pointed out that as traders bet on Bitcoin's decline with leverage, the continuous rise in price puts their margin accounts at risk of liquidation. This prompts urgent buybacks of Bitcoin to close positions, which in turn further drives up prices, creating a positive feedback loop of 'price increase - short ...
Morgan Stanley's cryptocurrency strategy team pointed out that as traders bet on Bitcoin's decline with leverage, the continuous rise in price puts their margin accounts at risk of liquidation. This prompts urgent buybacks of Bitcoin to close positions, which in turn further drives up prices, creating a positive feedback loop of 'price increase - short covering - price increase'. Coinglass data shows that in the past hour, long positions worth $5.762 billion were traded, up 52.94%, but short positions still account for 48%. Morgan Stanley stated that most short positions are concentrated below $115,000 as defensive levels. If the price continues to hold above $117,000, it could trigger a new round of short covering worth $500 million, further strengthening the upward momentum.
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Link: Morgan Stanley: BTC may be forming a short squeeze, short covering driving price increase [Copy]
