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Bitcoin Reaches Year-Long High on Short Squeeze, Rally Anticipation

Updated: Nov 27, 2023

BTC reached its 2023 zenith after a short squeeze and anticipation of a Santa Claus rally.

Bitcoin reaches a year-long high driven by a short-squeeze.
Credit: Foretoken Media 2023

This week, Bitcoin's price reached its 2023 high due to a short squeeze and anticipation of a Santa Claus rally. It experienced a slight correction and showed bullish technical signs, including a breakout from an ascending triangle pattern and a daily golden cross formation.

Bitcoin's price reached its 2023 peak on Tuesday, driven by a "short squeeze," a situation where the rapid increase in the price of an asset forces short sellers to buy back at higher prices, further driving the price up.

This rise was also attributed to anticipation of a 'Santa Claus rally,' a term used for the tendency of stock prices to rise in the last weeks of December​​. On Friday, November 10, Bitcoin closed at $37,301.63, marking a 1.6% increase for the day. However, the latest price slightly dropped to $36,975.09​​.

BTC reached a year high this week, at $37k.
Credit: CoinGecko

Technical Analysis

From a technical analysis perspective, there is a reversal head and shoulders (H&S) pattern in Bitcoin's price action over the past week, coupled with a bearish daily Relative Strength Index (RSI). This pattern suggests that Bitcoin's price might retest the support/resistance zone in the $31k to $32k range by the end of November​​.

After its significant gains, Bitcoin experienced a price correction. In contrast, other cryptocurrencies like Solana reported a 33% gain, and Ethereum saw a 10% increase during the same period​​.

Impact of Bitcoin Spot ETF Frenzy in the U.S.

The recent excitement around the spot Exchange-Traded Fund (ETF) in the United States played a role in Bitcoin's price movements. Following this event, Bitcoin's price broke out of an ascending triangle pattern, a bullish continuation pattern.

Additionally, the formation of a daily golden cross between the 50 and 200 Moving Averages (MA) was observed, which typically indicates a bullish market and invalidated the short-term bearish outlook​​.


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