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NewsBTC 2022-01-28 19:00:03

This Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Be Near

The current Bitcoin volatility Index values suggest that a short squeeze may be near, if past pattern continues to hold. Past Bitcoin Volatility Index Pattern Suggests A Short Squeeze May Happen Here As explained by an analyst in a CryptoQuant post, the BTC volatility index has now reached values where a short squeeze has happened in the past. The “volatility index” is an indicator that shows how much the price of Bitcoin has fluctuated in a day compared to its historical average. When the value of this metric rises, it means the crypto’s price has recently seen higher volatility as its price has deviated more from its average. On the other hand, low values suggest Bitcoin has been relatively stable lately as the price hasn’t seen any large movements. Volatility is often high following a liquidation event. These “liquidation squeezes” happen when the market is overleveraged, and so any big swings in the price lead to mass liquidations of futures positions. Related Reading | Bitcoin Bearish Signal: Binance Observes Massive Inflow Of 10k BTC The price usually crashes during a long liquidation squeeze due to a cascading effect by these liquidations. On the contrary, the price may instead jump up during a short squeeze. Now, here is a chart that shows the trend in the Bitcoin volatility over the past six months: The index's value seems to have risen and subsequently fallen recently | S...

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