Don’t bank on a bitcoin short squeeze, analysts say

Bitcoin prices are moving higher Friday, headed for back-to-back winning weeks after holding above the crucial $6,000 mark.

The market for Bitcoin, the world’s biggest digital coin, largely shrugged off Wednesday’s decision from the Securities and Exchange Commission to deny nine separate proposals for Bitcoin-related exchange-traded funds.

A single Bitcoin

BTCUSD, +1.77%

 was last trading at $6,551.46, up 2% since Thursday at 5 p.m. Eastern Time on the Kraken crypto exchange.

BTC/USD per TradingView

Read: These may be the 3 biggest hurdles to a Bitcoin ETF

Even with the prospect of consecutive winning weeks, Bitcoin remains in a tight range, and one asset management firm has warned that those positioning for a short squeeze should tread carefully.

“Everyone is talking about the short positioning on Bitfinex (as of today, roughly 39k Bitcoins or $250m using current prices). Everyone is speculating on a short squeeze. Everyone is positioning a future long with stop-limit orders (hopefully). And everyone is just waiting,” wrote Thejas Nalval, portfolio director, and Kevin Lu, director of quantitative research at Element Digital Asset Management.

“When everyone is going the same way on a trade, it can effectively be deemed a crowded trade and there is a heightened risk that the price will move the ‘wrong way’ to expectations because of some exogenous factor that nobody predicted for,” he said.

Read: Bets against Bitcoin have doubled since the beginning of August, exchange says

Altcoins following Bitcoin higher Friday

Smaller coins other than Bitcoin, colloquially known as altcoins, are trading in the green Friday. Ether

ETHUSD, +0.84%

is up 0.7% to $275.00, Bitcoin Cash

BCHUSD, +2.36%

is up 2.8% at $532.00, Litecoin

LTCUSD, +1.01%

is up 1.4% at $56.48 and Ripple’s XRP coin

XRPUSD, +1.41%

is trading at 32 cents, up 1.6%.

Bitcoin futures have tracked spot markets higher in early Friday trading. The Cboe Global Markets Inc.’s September contract

XBTU8, +1.68%

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