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Bitcoin short squeeze to $ 55,000?

© Reuters. – More than two months ago, the government of El Salvador under President Nayib Bukele decided to accept den as legal tender.

By law, companies are obliged to sell all products and services offered against BTC from September 7, 2021.

Fitch Ratings is pretty sure that this will come with some problems, especially in the country’s insurance industry.

There will certainly be policyholders who want to pay their premiums in Bitcoin, but the insurance companies themselves will have to “convert the Bitcoin into USD as soon as possible in order to limit the exchange rate risks.”

In addition, Fitch Ratings warned that the country is already sitting on a mountain of securities with poor credit ratings. A cryptocurrency like Bitcoin “will further increase the associated risks”.

Thus, this government move has the potential for the dollar breakout to end in disaster of unimaginable proportions.

Bitcoin on the way to $ 55,000?

Bitcoin is trading today, Tuesday, with a loss of 0.68 percent at a price of $ 46,982. Everything indicated that the all-important price resistance is being tested at $ 48,000.

If that level falls, then the closing of short positions will cause a rapid move higher towards $ 55,000, at least according to one expert at Cointelegraph.

Michaël van de Poppe said:

“The current scenario reminds me of what happened around the $ 6,000 zone. If Bitcoin breaks through $ 48,000, we will see a squeeze into the $ 55,000 to $ 56,000 area.”

The manager of Kraken Intelligence Research, Pete Humiston, contradicts this vehemently. Neither the Grayscale Bitcoin Trust (OTC 🙂 (GBTC) nor the Open Interest participated in the latest Bitcoin rally. Therefore, the current rally cannot be compared in any way with the start of the upward movement in 2020. Humiston said:

“In the time that we’ve seen the move from $ 30,000 to $ 48,000, open interest has fallen. At the same time, the Bitcoin Perp. Funding rate is still relatively low (albeit positive).”

From Marco Oehrl

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Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


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