Morgan Stanley: BTC May Be Forming a Short Squeeze, Short Covering Drives Price Up

The cryptocurrency strategy team at Morgan Stanley, known as "Da Mo," pointed out that when traders use leveraged instruments to bet against Bitcoin, the sustained price increase can put their margin accounts at risk of liquidation. At this point, they must urgently repurchase Bitcoin from the market to close their positions. This concentrated repurchase behavior, in turn, further pushes up the price, forming a positive feedback loop of "price increase - short covering - price increase."
Coinglass data shows that long orders worth $5,762,000,000.00 were transacted in the past 1 hour, up 52.94%, but the current proportion of short positions is still 48%. Morgan Stanley said that most short positions are concentrated in defensive points below $115,000.00. If the price continues to stand firm at $117,000.00, it may trigger a new round of short covering worth $500,000,000.00, further strengthening the upward momentum. [Odaily Planet Daily]