Options Corner: CleanSpark Could Offer Crypto Speculators A Massive Short Squeeze
Fundamentally, cryptocurrency miner CleanSpark Inc (NASDAQ:CLSK) has likely been moving higher due to speculation of monetary policy. In the trailing five sessions, for example, CLSK stock has jumped over 13%. Heading into the Federal Reserve Open Market Committee’s (FOMC) decision on a dovish adjustment of the benchmark interest rate — and more importantly commentary regarding the forward outlook — the security gained over 1%.
Still, it could ultimately be rising short interest that helps move CLSK stock even higher. Even more enticing, the stock is flashing a strong technical signal that is almost surely on the watchlist of meme traders and other market gamblers.
On the surface, the earlier moves of CLSK stock likely stem from buy-the-rumor, sell-the-news dynamics — and the headline rumor itself wasn’t all that groundbreaking. According to CME Group’s FedWatch, the tool projected a 100% likelihood that the Federal Reserve would cut the benchmark interest rate. Instead of the actual decision, it’s the central bank’s commentary that had investors glued to their screens.
For the Fed, it has an incredibly difficult job because inflation remains sticky. However, weak jobs data and negative adjustments help bolster the case of a dovish shift in monetary policy. If so, that could be supportive of digital assets, which in turn would likely lead to positive spillover effects for blockchain miners like CleanSpark.
Nevertheless, the concern that traders just encountering CLSK stock may have is its already-strong performance. In the trailing half-year period, CLSK is up roughly 40%. Given the volatility of crypto-exposed assets, legitimate fears of holding the bag exist. At the same time, this rally could be an early chapter of a longer-term narrative.
CLSK Stock Flashes A Bullish Signal Amid Rising Short Interest
As with any healthy market, CLSK stock has both believers and skeptics. What makes CleanSpark a must-watch entity is that the skeptics are putting …
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