Crypto Plays Set to Squeeze Overconfident Shorts

Bitcoin set off ‘buy’ signals on Wednesday after breaking psychological support at $10,000, dropping to a seven-week low at $9,231 and then closing back above the big round number. This price action made perfect sense from a structural standpoint, with the breakdown attracting a large supply of weak-handed short sellers hoping to capitalize on a momentum-fueled decline. The turnaround unfolded at a harmonic target, raising the odds for a bounce between $13,000 and $14,000.

Blockchain stock plays followed suit, dumping to multi-week lows and bouncing strongly into the closing bell. They are adding to gains on Thursday morning, with bitcoin lifting more than 15% overnight. Dip buyers not already positioned should watch key price levels for short-term signals that could generate windfall profits. Just keep in mind that these volatile instruments amplify the destructive impact of drawdowns, so it is important to keep position size small and place stops to limit losses. (See also: Is the Bitcoin Price Bubble Bursting?)

Bitcoin surged higher after breaking the $10,000 level, setting off a short squeeze that could gain traction in the coming days. …read more

Read more here: Crypto Plays Set to Squeeze Overconfident Shorts

Category: RIOT, KODK, BTC/USD

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