After an eventless weekend of predictable low-volume trading, Bitcoin remains near the $6,700 line.
With short orders remaining at very high levels, some may be tempted to enter a position in anticipation of an impending short squeeze — but is that a smart move?
Take a Look at the Stochastic RSI
If a short squeeze is going to happen, one technical indicator suggests it might not happen before Bitcoin experiences at least a minor correction.
The indicator in question is the Stochastic RSI, which combines the Stochastic Oscillator formula to a set of Relative Strength Index (RSI) values. In essence, it is a valuable (though imperfect) tool for measuring momentum.
At the moment, the Stochastic RSI on Bitcoin’s daily chart is showing a bearish signal, as the blue line looks set to cross the orange line — potentially indicating that a pullback is impending as any bullish momentum is waning.
However, like all indicators, the Stochastic RSI is little more than a tool. It is not a predictor, and should not be treated as one.
Do you think Bitcoin will see a short squeeze this week, or is a correction likely? Let us know your thoughts in the comments below!
Images courtesy of Shutterstock, TradingView.
[Disclaimer: This article is not intended as financial advice. Neither BeInCrypto nor the author should be held responsible for any financial gains or losses. Readers are always encouraged to do their own research, never invest more than they can afford to lose, and to consult with a licensed financial professional before making any major investment decisions. Trading in cryptocurrencies carries risk.]
[Full Disclosure: The author of this article holds Bitcoin (BTC).]