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19 September, 2024

Bitcoin Bullish Swing: Is It Sustainable? A Top Analyst Weighs In

19 September, 2024

Will Bitcoin’s Bullish Run Continue? A Top Analyst Weighs In

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The cryptocurrency market is known for its volatility, and Bitcoin, the world’s largest cryptocurrency, is no exception. As Bitcoin continues its recent bullish swing, analysts are scrutinizing its potential trajectory. One prominent figure in the crypto space, Willy Woo, has shed light on both the short-term and medium-term outlook for Bitcoin.

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Woo, a renowned analyst, has stated that Bitcoin’s current bullish trend is likely to persist in the short term, with \”likely 1 week left in play.\” He’s also provided insights into a key metric: the Bitcoin Spot Exchange Supply.

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Spot Exchange Supply and Bitcoin’s Trajectory

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A recent decline in the Bitcoin Spot Exchange Supply suggests investors are moving their coins into self-custodial wallets. This is generally considered a bullish sign, as it indicates a decrease in the available supply for selling. However, the picture becomes more complex when considering the role of \”Paper BTC\” in the market.

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Paper BTC refers to derivatives contracts related to Bitcoin, allowing users to speculate on its price without owning any actual Bitcoin. The rise of Paper BTC has had a significant impact on market dynamics.

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While the Spot Bitcoin exchange supply has been declining, the total BTC exchange inventory (which includes both Spot and Paper BTC) has remained sideways. This indicates that Paper BTC is being printed at a similar rate as Spot BTC, which investors are withdrawing. This could pose a challenge to Bitcoin’s upward momentum.

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Short Squeeze Could Be a Game Changer

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Despite the potential for a bearish impact from the Paper BTC trend, Woo highlights the possibility of a short squeeze. A short squeeze occurs when a significant number of traders who have shorted Bitcoin (betting on its price decline) are forced to cover their positions, pushing the price upwards.

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\”Current demand and supply is neutral bearish, but signs of moving into a bullish structure if we get some liquidations,\” says Woo.

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Bitcoin’s Price Action

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While Bitcoin surpassed the $61,000 mark yesterday, it has retreated slightly today, hovering around $59,600. The market remains dynamic, and investors are keeping a close eye on both short-term and long-term factors to gauge the future direction of Bitcoin.

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Conclusion:

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The outlook for Bitcoin remains complex, with both bullish and bearish factors in play. While the short-term trend appears bullish, the impact of Paper BTC and the potential for a short squeeze add layers of uncertainty. Only time will tell whether Bitcoin’s recent bullish run will continue in the medium to long term.