Hal Press, founder of North Rock Digital, took a cautious stance on the future of the market and advised cryptocurrency investors to do the same.

While Press does not expect a sharp decline, he believes that the crypto market may face multiple challenges.

Low liquidity levels do not favor bulls

Hull Press advertiser That many short positions had accumulated during the period of low liquidity. This led him to believe that a short squeeze might be on the horizon.

A short squeeze occurs when the price of a cryptocurrency suddenly rises, forcing traders who had bet on it to quickly buy the cryptocurrency to cover their positions and cut their losses. This sudden buying move can drive the price higher, creating a cycle that “squeezes” short sellers.

A short squeeze can lead to rapid price increases, which can be driven by market sentiment, news, or other factors that trigger a shift in market direction.

Data from CoinGlass reveal The number of short positions is higher than the number of long positions across major cryptocurrency exchanges. Almost 50.69% of all traders are betting that the Bitcoin price will go down.

Despite the high probability of a short squeeze, the Press stresses that long-term concerns about the cryptocurrency market remain.

Multiple factors that cryptocurrency investors should consider

Press noted that Ethereum is the fund’s largest position and that its dovish stance is not primarily due to the upcoming Shanghai or Shapella upgrade, scheduled for April 12th. Current offer.

Instead, the press is concerned about the broader global landscape, with many countries adopting stricter regulations on encryption, making it more difficult for the technology to gain mainstream adoption.

The leaders of Britain, Japan, Canada, Germany, France, the United States and the European Union support stricter regulations to protect customers and greater transparency for cryptocurrency companies. The G7 countries plan to set global regulatory standards for cryptocurrencies.

According to the press, the resilience of the major cryptocurrencies can be attributed to inelastic demand. For example, Binance CEO Changpeng Zhao transferred nearly $1 billion in BUSD from his industry redemption wallet into “native crypto” such as BTC, BNB, and ETH.

The move was prompted by Paxos’ decision to stop minting the BUSD coin, which caused its market value to gradually decrease.

Now that that conversion is starting to wane, there’s less new money entering the space. Price believes that these dynamics challenge the market to maintain its current levels over the long term.

The North Rock Digital founder also warned that potential regulatory action could force investors to reconsider their positions. He emphasized that price drives the narrative. So, once a significant regulatory action occurs without a strong buyer to support the market, the narrative is likely to change.

The press acknowledges that he could be wrong, and the market could continue to bullish. However, he considers that the risks described above are worth considering for a more measured approach to the cryptocurrency market.