Analyst: Bitcoin shorts are overly crowded, may rebound and squeeze before the Easter holiday

Bitcoin has fallen below $66,000, with a 24-hour decline of 3.7%, continuing to fluctuate in the $60,000 to $70,000 range in recent weeks. Glassnode indicates that spot demand is beginning to absorb selling pressure, but it is still insufficient to drive a sustained upward movement. It is estimated that 8 to 9 million BTC have a holding cost above the current price, forming a persistent "resistance" that suppresses rebounds, while long-term holders are still realizing losses at high levels, indicating that the stage of chip redistribution has not yet ended.

In terms of derivatives, the funding rate has remained negative for most of the first quarter, meaning traders are paying a premium to hold short positions. Bitfinex analysts point out that "traders are willing to pay a premium to maintain downside exposure," and this concentrated short position could trigger a short squeeze if upward momentum occurs. Demand in the options market has also declined, with implied volatility contracting and skew slightly leaning towards downside protection, indicating that investors prefer to hedge risks rather than bet on a breakout.

On the macro front, Bitunix analysts state that the market has entered a "supply chain disruption" phase, with energy and industrial metal production being hindered, beginning to transmit to inflation. Currently, liquidity for Bitcoin is concentrated between $69,000 and $70,100, with a key testing level below around $65,500. K33 notes that traders are entering the typically calmer Easter holiday window with a "aggressively cautious" stance. From a long-term perspective, Pantera Capital founder Dan Morehead stated in a recent podcast that Bitcoin may need another six to eight months to reach the bottom, but he also believes that Bitcoin has reached "escape velocity," with institutional participation still close to zero, and the next round of increases will be driven by broader adoption.