According to Odaily, Morgan Stanley's cryptocurrency strategy team has observed a phenomenon where Bitcoin's price increases can lead to margin account risks for traders betting against the cryptocurrency using leverage. This situation forces traders to urgently repurchase Bitcoin to close their positions, further driving up the price and creating a positive feedback loop of price increases and short covering.
Data from Coinglass indicates that in the past hour, long positions worth $5.762 billion were executed, marking a 52.94% increase. Despite this, short positions still account for 48% of the market. Morgan Stanley notes that most short positions are concentrated below the defensive level of $115,000. If Bitcoin's price remains stable above $117,000, it could trigger a new wave of short covering worth $500 million, further strengthening the upward momentum.
