We are entering into an extreme dangerous zone for shorts. Whenever BTCUSDLONGS v SHORTS gets under 1 (more shorts than longs) the chance of a major short squeeze grows rapidly. When the ratio gets to between .6 to .8 the squeeze is virtually imminent, and it is often violent.
We are currently at .62, which is effectively the all time low.
The reason why this occurs:
1. Retail traders are "herding" into the position (major behavioral bias). They are generally weaker hands and will close at the first sign of trouble
2. Bears run out of juice. There is nobody left to sell
We are currently at .62, which is effectively the all time low.
The reason why this occurs:
1. Retail traders are "herding" into the position (major behavioral bias). They are generally weaker hands and will close at the first sign of trouble
2. Bears run out of juice. There is nobody left to sell