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The Chief Investment Officer of Risk Dimensions, Mark Connors, stated that the recent increase in Bitcoin’s value is linked to a “short squeeze” effect in the market.
In his assessment, the rise in the price of the leading cryptocurrency does not indicate the establishment of a sustainable trend reversal.
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“This increase is a result of the closure of short positions. Iran’s attacks on energy infrastructure have altered the flow of capital, and Bitcoin has accelerated its movement as the outflow of funds from cryptocurrency funds managing reserves has reversed,” Connors explained.
He emphasized that, despite the recovery in prices, the bearish cycle remains intact. Significant resistance levels persist in the market, and without a consistent rise in spot demand, the current rebound may prove to be short-lived.
According to Connors, until Bitcoin surpasses the $75,000 mark and maintains a position above it, it is premature to discuss the formation of a bullish trend. A return to the $100,000 level is possible, but this would be in a longer-term context.
Previously, the head of analytics at New York Digital Investment Group (NYDIG), Greg Cipolaro, mentioned that Bitcoin’s dynamics will largely depend on the impact of artificial intelligence on the economy and the liquidity of central banks.
