BTC looks like it's going higher

On Monday, the Bitcoin (BTC) price rose from $ 47,000 to over $ 53,000, while shorts worth roughly $ 150 million were liquidated within a few hours.

Ethereum (ETH), Binance Coin (BNB) and other major cryptocurrencies also rose about 15% over the same period, while the cryptocurrency market as a whole saw strong short pressure.

After Bitcoin's 12% recovery in a single day, the futures market has been completely zeroed and funding rates remain neutral.

Why does today's Bitcoin short edition look like bullish?

Short-term tightness in trade means that short sell orders in the futures market are liquidated in a short time.

When the shorts are purged, short sellers are forced to reclaim their positions, ironically leading to increased buyer demand in the market.

Thus, the number of shorts decreases rapidly and long contracts or purchase orders begin to dominate the market.

When the number of Longs increases significantly, Bitcoin's funding rate rises. This is because the funding rate increases when there are longer orders in the market.

If the financing rate is above 0%, buyers have to pay short sellers part of their positions to sellers every eight hours and vice versa.

In the case of Bitcoin over the past 24 hours, the funding rate remained relatively low, despite BTC's strong rally.

In fact, according to Bybt.com, the funding rate for Bitcoin on major exchanges is below 0.01%, which is below the neutral rate.

This means that there are still more shorts than longs in the Bitcoin futures market, which could catalyze more of the upside.

This trend is bullish for Bitcoin because it comes after the mass liquidation of short contracts. Lex Moskovski, chief investment officer of Moskovski Capital, said:

“~ $ 150 million #Bitcoin shorts were purged in this short move. Nothing smells better than roasted bears in the morning. "

Traders believe Bitcoin can target higher in the short term

In the near term, traders say the $ 55,500 price level is a key level that must be recovered for a chance at all-time highs.

Johnny, a cryptocurrency derivatives trader, said:

"Swept the lows and now we're having a very strong jump. We haven't gotten out of the forest yet. We can get back $ 55,500 and then we can talk about the new ATH. For now, play level by level. Strong reaction so far."

Adnan Van Dal, a former institutional trader, emphasized that if Bitcoin does not drop until the US market opens, the likelihood of a larger rally increases. Dal wrote:

"If $ BTC can open to the US (EUR am), imagine the cud will be fine for a while. Open durable goods orders, real data is good, SPX near ATH, started taking profit Friday and the firm started. Think helpful - this year SPX / The $ BTC weakness is one thing. According to the TSLA wildcard character. "

As long as Bitcoin remains open to the US market above $ 51,000 and aims for a recovery above $ 55,000, the all-time high chances for the foreseeable future will remain strong.