Altcoins see gains in a 'mini altcoin season' while Bitcoin experiences a short squeeze, leading to increased volatility
Bitcoin, the world's largest cryptocurrency, has seen a significant surge in its price, reaching a high of $35,500. This surge has been attributed to a widening altcoin rally and a risk-on sentiment in traditional markets. The total value of the cryptocurrency market has reached a 16-month high, with the market capitalization topping $1.31 trillion, the highest since May 2022.
Altcoins such as Solana, toncoin, and Crypto.com's Cronos ecosystem token have also seen gains of between 5% and 10%. This capital rotation into altcoins is creating what is being referred to as a "mini altcoin season". This, along with accelerating inflows into bitcoin-related funds, is providing support for Bitcoin's price. November is being seen as a solid month for aggressive accumulation of bitcoin.
Bitcoin also experienced a "short squeeze" that pushed its price near $36,000. This caused those who had bet against Bitcoin (shorts) to feel the heat. The open interest (OI) on exchanges remained elevated, leading to increased volatility. Traders had predicted this squeeze, with momentum increasing when the price reached $34,800.
On-chain monitoring resources suggested that $36,000 would remain out of reach for the week. However, traders observed an interesting shift in derivatives composition, with Bybit showing long interest while Binance was more short-oriented. The short squeeze resulted in the disappearance of short open interest on Binance.
At the time of writing, Bitcoin was trading at $35,300 with OI still above $15 billion. This indicates that the cryptocurrency market is still experiencing high levels of volatility. Traders and investors are advised to keep a close eye on market movements and to trade cautiously.