Key points:
As market expectations turn bearish on BTC and altcoins, BTC is attempting to rebound in a concentrated area of short sellers.
CME Group data shows that speculative ETH traders have formed the largest leveraged short position in history.
Cryptocurrency traders may proactively reduce risk exposure ahead of the Federal Reserve's Jackson Hole symposium.
BTC rebounded to $116,000 after the Wall Street opening on Monday, with bulls striving to trigger a short squeeze.
Data from Cointelegraph Markets Pro and TradingView shows that BTC/USD is suppressing overnight declines, after the price briefly fell to around $115,000.
According to CoinGlass data, as of the time of writing, a sell-off across the cryptocurrency market has liquidated approximately $500 million in long positions within 24 hours.
Traders remain cautious about market weakness, continuing to predict that BTC and altcoins will hit new lows.
Notable trader BitBull pointed out in their latest analysis on the X platform: "This could be the worst-case scenario for BTC right now. It will continue to consolidate in the $112,000 to $120,000 range in Q3, while altcoins may rise."
Cryptocurrency trader, analyst, and entrepreneur Michaël van de Poppe agrees with this view.
He summarized: "If Bitcoin cannot break through $116,800, I think we will see a sweep of the lows, at which point everyone will declare 'the bear market has begun,' and that is exactly when you should buy."
However, exchange order book data shows that many traders have a clearer view on short-term price movements.
Financial and trading information platform Barchart noted that speculative ETH traders have now established the largest leveraged short position in the history of this altcoin.
Speculators have now built the largest leveraged Ethereum $ETH short position in history 🚨🚨 pic.twitter.com/CRKS2YgZAk
Some analysts foresee a potential short squeeze, with analysts on the X platform focusing on the short "cluster" areas for BTC and ETH.
CoinGlass confirms that the key short liquidation level for BTC/USD is at $116,500.
Trading firm QCP Capital pointed out that this round of market correction is primarily driven by macroeconomic factors.
The firm stated that the annual Jackson Hole symposium held by the U.S. Federal Reserve this week is a typical risk-reduction event for traders, while inflation concerns remain prominent.
The latest Asia Color report predicts: "Before Chairman Jerome Powell takes the stage on Friday, the market may maintain a sideways trend, attracting buyers when it dips to around $112,000, while facing selling pressure when it rebounds to $120,000."
QCP further noted that Powell's speech at the 2024 Jackson Hole symposium will contain important insights into future monetary policy easing.
Related: Opinion: The U.S. should use tariff surpluses to fund Bitcoin (BTC) strategic reserves
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Analysts: Traders Short Ethereum at a Record $4,300 as Bitcoin (BTC) and Ether (ETH) Face Squeeze”
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