Veteran trader Peter Brandt has issued a warning to investors, stating that Bitcoin (BTC) could be in trouble as it appears to be forming a head and shoulders pattern.
The pattern is a technical analysis indicator of a bullish-to-bearish trend reversal. However, another well-known crypto analyst, Inmortal, believes that Bitcoin’s recent dip could be the start of a short squeeze.
A short squeeze occurs when traders who borrowed assets at a certain price in hopes of selling them for less to make a profit are forced to buy back the assets as momentum moves against them.
This triggers further rallies. Inmortal pointed out that the price of Bitcoin is at a range low, and open interest is up while the price is down, creating the ideal conditions for a short squeeze.
However, he reminded investors that buyers need to step in to force sellers to start closing their positions. As always, traders and investors are advised to monitor Bitcoin’s price action closely and adjust their strategies accordingly.
