BTC ( Bitcoin) and the digital markets in general have had better days. BTC reached an all-time high of $64K three months ago, but has fallen 48.66% over that time. Bitfinex saw a surge in USD/BTC short positions around 17 days ago. This was a level not seen since June 17, 2019,
Bitcoin hit its lowest price point for a while at $28,600 per coin 20 days ago. Today, the cryptocurrency is just 13.72% higher than that low price point. After the spike in short positions on June 25, things settled down on June 27, and shorts remained low. However, Bitfinex short positions are beginning to rise again today and some observers believe this is a bearish signal.
At the time this article was written, USD/USD shorts on Bitfinex have risen at least half a step towards the June 25 high. Bitfinex has recorded 13,600+ shorts of BTC/USD, while long BTC/USD positions have exceeded 2019’s all time highs.
51,000 Bitcoin Long Positions – Hope for a Quick Pump
On Monday, 51,100 long positions have been traded on the exchange. Both shorts and longs are continuing to rise. Although the number of long positions does not necessarily indicate a bullish outlook, it is indicative of optimistic sentiment by market participants, which suggests that they are hopeful for a rise in future trading.
The Ethereum short position chart pattern looks a little different from bitcoin’s. Shorts have increased in recent times, but have also begun dipping today. The ETH/USD long position also shows a divergence from BTC’s current long records. On Monday, ETH/USD longs were low on Bitfinex.
Simon Peters, Etoro’s market analyst, places much of the crypto market chaos on China’s digital currency mining problems and the regulatory climate globally.
Peters stated that both crypto assets ( BTC & ETH ) were affected by crackdowns in China as well as regulatory changes in different countries around the globe in a note to Bitcoin.com News Monday.
Bitcoin will emerge, but not right now.
– Bitcoin shorts continue to rise, as we said yesterday. – There are no notable outflows onchain.
Major levels: $31k and $36kYou don’t have to be a mess, patience is a virtue.
– Joseph Young (@iamjosephyoung July 12, 2021
A short squeeze may also be possible if there are USD shorts. A “short squeeze” in USD markets is not uncommon. When it occurs, it triggers a very fast pump that leaves short sellers behind and puts them in the land of liquidations. Short squeezes are most common in bitcoin trading when there is an unusually large amount of Bitcoin/USD short positions.
This can also happen to longs who are playing in a “long squeeze”. A sudden and significant drop in bitcoin’s price can also cause panic selling, and longs may be forced to liquidate.