The Future Coin

Bitcoin

$37,137.26

BTC 4.84%

Ethereum

$1,257.56

ETH 10.42%

XRP

$0.29

XRP 3.67%

Litecoin

$147.89

LTC 5.67%

EOS

$2.83

EOS 5.24%

  • News
    • Bitcoin News
    • Ethereum News
    • Ripple News
    • Litecoin News
    • Altcoin News
    • Blockchain News
    • Business News
    • Technology News
    • Policy & Regulations
  • Markets
    • Market News
    • Market Analysis
    • Price Indexes
    • Top Cryptocurrencies
    • Heatmap
  • Opinion
  • Cryptopedia
    • Explained
    • Bitcoin101
    • Ethereum101
    • Bitcoin Cash101
    • ICO101
    • Ripple101
  • Press Releases
No Result
View All Result
The Future Coin
No Result
View All Result
Home Markets

Stock Market Net Shorts Reaching Decade Highs Could Fuel a Bitcoin Breakout

by The Future Coin
June 22, 2020
in Markets
0
Stock Market Net Shorts Reaching Decade Highs Could Fuel a Bitcoin Breakout
152
SHARES
1.9k
VIEWS
Share on FacebookShare on Twitter

After a record-breaking recovery rally, traders aren’t convinced any of the recent gains in the S&P 500 are sustainable and have amassed the largest net short futures position over the past decade. Due to the ongoing correlation between Bitcoin and the stock market, a massive short squeeze in the S&P 500 index could help Bitcoin finally break out from resistance at $10,000.

2020 is a Rollercoaster Year For the Financial Markets

At the start of 2020, Bitcoin went on a rally alongside other big-name cryptocurrencies like Ethereum, Chainlink, and Tezos. The bullish momentum to kick off the new year helped Bitcoin reclaim resistance at $10,000.

Meanwhile, most major global stock market indices set records for their highest prices ever traded.

Just as the milestones were set in the stock and crypto market, fears over a then-unknown pandemic just beginning caused investors to panic, cashing out as many assets as they could in a mad dash of liquidation.

RELATED READING | DEUTSCHE BANK WARNS OF DISASTER WORSE THAN PANDEMIC THAT COULD COMPLETELY KILL BITCOIN

The stock market tumbled, going from all-time highs to a record-setting worst quarterly close in history. Bitcoin and the rest of the high-risk crypto market came crashing down alongside the S&P 500, Dow, and other major US indices.

The two assets also recovered alongside one another, keeping the sudden and unusual correlation going. Now, as short positions stack up to the largest net short position across S&P 500 futures over the last nine years, it could end up helping Bitcoin break out from its bear market once and for all.

bitcoin spx s&P 500 big net short

Epic Stock Market Short Squeeze Could Help Bitcoin Break Through $10,000

As most crypto traders are likely well aware of at this point, when short positions are overwhelmingly leaning towards one side or the other, a contrarian move is likely, as it causes “max pain” across the market.

Net short positions in S&P 500 futures have reached the highest level over the last nine years.

With net short positions so heavily outweighing long positions in S&P 500 futures, a powerful short squeeze is possible.

A short squeeze is a strong move up, purposely designed to force short positions to cover, further driving up the price of an asset. Oftentimes, when assets are stuck below resistance, its the cascading effect of shorts covering and stops being hit that helps propel price through resistance.

S&P 500 short squeezing from here could help it trade closer to or perhaps above its previous all-time high. And if the correlation between the S&P 500 continues, a short squeeze in the stock market could help Bitcoin price finally break through $10,000 once and for all.

bitcoin sp500 spx stock market short

S&P 500 Monthly | Source: TradingView

Such a scenario, however, is predicated on a short squeeze that may or may not happen. The last instances of short positions reaching such highs resulted in year-long consolidation phases before the next move higher.

RELATED READING | MONEY MANAGER RECOMMENDS ZERO EXPOSURE TO EQUITIES, WILL CAPITAL FLOW INTO BITCOIN?

Short positions stayed at similar levels throughout the entire duration of each 12-month long period in SPX futures. Should history repeat, the downside in the stock market is only just beginning, and instead of helping Bitcoin along, the S&P 500 correlation could hinder the cryptocurrency’s bull market a while longer.

Featured image from Shutterstock.

Charts from TradingView.



Source link

EDITOR’S CHOICE

Massive blackouts have hit Iran. The government is blaming bitcoin mining.

Altcoins defy Bitcoin’s swings, going ballistic

North America Blockchain Identity Management Market 2021 Analysis by Popular Key Companies: Amazon Web Services, Inc., Bitfury Group Limited, Bitnation, Blockverify, BTL Group Ltd., Cambridge Blockchain, – KSU

Bill would prohibit North Dakota businesses from turning down cash

ETH Price Levels To Watch

Ethereum (ETH), Litecoin (LTC) And Cardano (ADA)

Best Pick For You

News

  • Altcoin News
  • Bitcoin News
  • Blockchain News
  • Business News
  • Ethereum News
  • Litecoin News
  • Ripple News

Features

  • Market Analysis
  • Opinion
  • Explained
  • Policy & Regulations
  • Top Cryptocurrencies
  • Technology News

Market Tools

  • Market News
  • Price Indexes
  • Bitcoin Price Index
  • Ethereum Price Index
  • Bitcoin Cash Price Index
  • Litecoin Price Index
  • Monero Price Index
  • HeatmapPartner

Cryptopedia

  • Explained
  • Bitcoin101
  • Bitcoin Cash101
  • Ethereum101
  • ICO101
  • Ripple101

© 2020 Coingraph

No Result
View All Result
  • News
    • Bitcoin News
    • Ethereum News
    • Ripple News
    • Litecoin News
    • Altcoin News
    • Blockchain News
    • Business News
    • Technology News
    • Policy & Regulations
  • Markets
    • Market News
    • Market Analysis
    • Price Indexes
    • Top Cryptocurrencies
    • Heatmap
  • Opinion
  • Cryptopedia
    • Explained
    • Bitcoin101
    • Ethereum101
    • Bitcoin Cash101
    • ICO101
    • Ripple101
  • Press Releases

© 2020 Coingraph

Login to your account below

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
bitcoin
Bitcoin (BTC) $ 36,837.00
ethereum
Ethereum (ETH) $ 1,248.07
tether
Tether (USDT) $ 1.00
polkadot
Polkadot (DOT) $ 17.32
ripple
XRP (XRP) $ 0.283596
cardano
Cardano (ADA) $ 0.348722
litecoin
Litecoin (LTC) $ 146.55
bitcoin-cash
Bitcoin Cash (BCH) $ 499.22
chainlink
Chainlink (LINK) $ 21.67
stellar
Stellar (XLM) $ 0.296097
binancecoin
Binance Coin (BNB) $ 42.90
usd-coin
USD Coin (USDC) $ 0.997880
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 36,875.00
bitcoin-cash-sv
Bitcoin SV (BSV) $ 206.09
monero
Monero (XMR) $ 158.13
eos
EOS (EOS) $ 2.81
aave
Aave (AAVE) $ 189.77
havven
Synthetix Network Token (SNX) $ 16.50
tezos
Tezos (XTZ) $ 2.98
tron
TRON (TRX) $ 0.030575
cosmos
Cosmos (ATOM) $ 8.92
theta-token
Theta Network (THETA) $ 2.11
nem
NEM (XEM) $ 0.219325
celsius-degree-token
Celsius Network (CEL) $ 4.92
vechain
VeChain (VET) $ 0.027540
uniswap
Uniswap (UNI) $ 8.32
crypto-com-chain
Crypto.com Coin (CRO) $ 0.077535
neo
NEO (NEO) $ 23.91
okb
OKB (OKB) $ 6.10
compound-ether
cETH (CETH) $ 25.01
maker
Maker (MKR) $ 1,555.20
compound-usd-coin
cUSDC (CUSDC) $ 0.021460
dai
Dai (DAI) $ 1.00
leo-token
LEO Token (LEO) $ 1.33
dash
Dash (DASH) $ 129.43
iota
IOTA (MIOTA) $ 0.435579
dogecoin
Dogecoin (DOGE) $ 0.009274
zcash
Zcash (ZEC) $ 109.97
binance-usd
Binance USD (BUSD) $ 1.00
filecoin
Filecoin (FIL) $ 23.16
yearn-finance
yearn.finance (YFI) $ 33,905.00
huobi-token
Huobi Token (HT) $ 5.21
avalanche-2
Avalanche (AVAX) $ 12.67
ethereum-classic
Ethereum Classic (ETC) $ 7.94
solana
Solana (SOL) $ 3.48
compound-governance-token
Compound (COMP) $ 217.06
sushi
Sushi (SUSHI) $ 7.04
ftx-token
FTX Token (FTT) $ 9.52
zilliqa
Zilliqa (ZIL) $ 0.071745
kusama
Kusama (KSM) $ 90.33