Bitcoin Longs Squeezed As Futures Sink

Fresh BTC VolatilityBitcoin prices appear to be stabilising on Tuesday following a more than 10% crash yesterday. The crypto space has been heating up again in recent months with an almost 70% rally off the October lows. The move higher has been largely driven by excitement around expected Bitcoin ETF approval from the SEC. A number of groups, including BlackRock and Fidelity have submitted applications this year. While the SEC has so far postponed its decision until next year, traders are seemingly confident that approvals are coming, keeping the market underpinned.Positioning Clear-outWith that in mind, yesterday’s drop lower is likely a sign of profit taking kicking in on the recent rally. Funding rates in Bitcoin have risen to overstretched levels recently, suggesting that long positions had become overcrowded. The clearing of the orderbook in yesterday’s rout can therefore be seen as a welcome sign for bulls, indicating room for a more sustainable move higher now that over-leveraged players have exited the market.US Inflation Up NextLooking ahead this week, the main focus will now be on the latest US CPI print due tomorrow. Any resulting USD weakness will be firmly bullish for BTC through the rest of the week. However, any unexpected upside might see the current BTC dip extend further if USD rallies.Technical ViewsBTCThe rally in BTC has stalled for now ahead of a test of the 46430-resistance level. Price is now correcting lower though remains above the 38255-level support. While this area holds, look for the rally to continue medium term. If we break below, however, 31284 will be the next support to note.