John Bollinger, the creator of the famous and widely used technical indicator, has recently shared his latest analysis of Bitcoin price using his own indicator.
According to John, he warns of an upcoming “squeeze.” This can be understood as a tightening behavior of the indicator’s boundaries. It doesn’t lean towards any specific trend, but it predicts a pivotal moment for the upcoming trend. Such a “squeeze” is formed by the narrowing of the Upper Band and Lower Band, creating a knot or constriction.
In trading, a “squeeze” as mentioned by John sometimes also signifies a forecast of an impending significant liquidation. Derivative data fully supports this notion.
Observations from @McClellanOsc indicate that the Bitcoin futures’ total volume (Open Interest + Futures) has peaked this week. Historical data suggests that such peaks in derivatives have often signaled a potential peak or bottom for Bitcoin.
According to Coinglass data, the Bitcoin Open Interest is currently around $14 billion, which is the highest level since May 2022.
Are Bitcoin traders currently more Long or Short?
The Funding Rate can be understood as the difference between the Long and Short positions. This difference is determined by comparing Futures prices and Spot prices. A positive Funding Rate means that Longs are “paying” Shorts, and vice versa. Monitoring this data can help determine which side has higher expectations.
Therefore, the chart shows that the Funding Rate has mostly been positive from the beginning of the month until now. During this period, Bitcoin’s price fluctuated around $30,000. This indicates a dominant Long sentiment. In the past two days, the Funding Rate has also shown a significant increase. Perhaps many traders are expecting news related to the CPI.
The losses for Long traders at this moment would be significant if Bitcoin experiences a sharp dump.
On July 12th, the CPI (Consumer Price Index) news will be released in the US. News like this has the potential to trigger significant liquidation for the side with larger bets. The market may soon witness the anticipated “squeeze” mentioned by John Bollinger.