Bitcoin has been on a roller-coaster ride in the last 24 hours, nearly losing the $18,000 mark and now approaching the pivotal $20,000 level. While market participants believe the bullish Uptober rally will continue, the possibility of a bull trap haunts the price rally, mainly because some metrics have been showing levels that are typical.
As a result, it is now possible to speculate that the price of BTC may drop sharply after a short uptrend.
In an intriguing update, one of the crypto trading platforms, Skew, shared metrics comparing the Binance open interest and the price. As the BTC price surged, the shorts were equally blown up. Hence, responding to the post, one of the well-known analysts, Capo, who has been bearish on Bitcoin for quite a long time, confirms a short squeeze.
Despite the sharp jump in the price of BTC, the asset shrank at the same level as the Bollinger Bands continued to shrink. Therefore, it shows that a remarkable step forward is yet to come.
As seen in the above chart, the Bollinger bands continue to squeeze ever since the beginning of the month. On the other hand, the Bollinger bandwidth (BBW) which offers an easy way to visualize consolidation has dropped extremely lower. This indicates that volatility is very low and hence may be due to sudden price action, regardless of the direction.
Collectively, the price of Bitcoin (BTC) appears bullish, but there could also be the potential for a short-term bounce, which could trap the bulls.
