My theory was that crypto whale traders swooped in late last year not merely because of the 85% decline in BTC but because of a key technical trading factor – and nothing more.
Willy Woo confirms that the recent price rise was driven more by whales buying and trying to manufacture a short squeeze.
This is both good news and bad news for bulls.
GOOD NEWS FOR BTC BULLS
The good news is that bitcoin will behave like most low-float illiquid stocks.
With low-float illiquid stocks, the limitation on share count means that the stock will always be subject to high levels of volatility and large spreads on the bid-ask.
It also means that any attempt to short the stock down comes with inordinate risk considering a sudden surge in buying will crush the short-sellers.
With bitcoin, there will always be a certain number of short-sellers, and that means short squeezes like this are going to be a more likely occurrence than not. That should theoretically provide a level of price support over time.
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