Bitcoin Death Cross - Short Squeeze Weekend ?!
John Barry | Thu Jun 17 2021
Bitcoin Death Cross 2021 – Short Squeeze this Weekend?
This is my 3rd article this week about the Bitcoin Death Cross (BDC) of 2021.
The first article described: what a Death Cross is; who follows and trades it; history of prior BDCs; why its a bullish signal. https://quantifycrypto.com/blog/bitcoin-death-cross-of-2021---why-its-bullish
The second article reviewed the recent increase is short interest and how the 2019 BDC has been misreported. https://quantifycrypto.com/blog/bullish-bitcoin-death-cross-followup
Key highlights today June 18, 2021
- Bitcoin short interest now at 2021 highs
- The estimated date for the BCD is Saturday June 19.
- There are similarities between today’s price pattern and the BCD pattern of 2019.
- Bitcoin price movement prediction at the end of this article.
Current Bitcoin Chart
The 200-day moving average for Bitcoin is now $42,805 (up from $41,590 on June 9th). The 50-day moving average is now $43,622 (down from $45,527 on June 9th) Every day the two moving averages are getting closer.
Bitcoin Short Interest Chart
The short interest level is now at this highest level since Mar 17th 2020. This indicates the likelihood for a short squeeze is increasing. The level of short interest on Bitfinex cryptocurrency exchange, for example, has increased over 2,000% this month alone.
Current Bitcoin Analysis - June 17, 2021
The similarities between 2019 and 2021 BDC patterns are worth noting. In 2019 you had a downturn into the BCD day, many positions were short, and a short squeeze followed. In 2019 the Bitcoin price increased 40% from $7,443 to over $10,500.
I expect the trading pattern for Bitcoin will be flat to bearish until 5 pm (EST) Friday June 18th. When the American stock market closes at 4pm that day, many will focus on cryptocurrency trades as little stock news or price action occurs after the Friday close. With the pending BDC and negative price movement some stock traders will be shorting Bitcoin when short positions are already at a yearly high.
After 5pm I will be looking to see a small increase in the Bitcoin price. During the next few hours, Bitcoin may stabilize as the stock traders go to sleep and the crypto whales get ready to buy in. I feel the wee hours of the morning of Saturday June 19th has the potential to turn into a short squeeze event. A price above $42,000 will be a very bullish signal, as additional price increases will put pressive on short positions. Remember crypto whales love to liquidate stock traders.
Keep in mind:
- Do not try to catch a falling knife, want to see price stability for multiple hours.
- Many significant Bitcoin price moves are preceded by a smaller move in the same direction.
- Do not trade on leverage/margin.
- Do take profits.
The platform Quantify Crypto provides live cryptocurrency prices, technical analysis, news, heatmaps and more. Our flagship product is the trend algorithm, designed to be on the correct side of significant cryptocurrency price moves.
None of this is meant to be financial advice and I do not have any financial expertise. Although I worked at the New York Stock Exchange for over 23 years, it was as a developer supporting computer systems, not as a stock trader.
Full discloser: I do own Bitcoin and other Altcoins.