Bitcoin price set to rebound? BTC shorts on Bitfinex crash by 25% after record spikes
July 19, 2021 @ 11:54 +03:00
Bitcoin (BTC) bears should watch out for a potential blow as the number of margined short positions on the Bitfinex exchange crashes by roughly 25%. The dataset dropped to 11,066 BTC as of 12:20 GMT Saturday, compared to 14,897 BTC at the session’s open. Meanwhile, the drop came as a part of a bigger downside move that started on July 15. On the day, the total number of margined short positions had reached 17,053 BTC. In simple terms, BTCUSDSHORTS represents the number of margined bearish positions on Bitfinex, measured in BTC. Traders borrow funds from Bitfinex — their broker — to bet on bearish outcomes for the instrument BTC/USD. That said, the latest data shows that traders have reduced their leveraged bearish exposure in the Bitcoin market.
Popular trader Scott Melker claimed that each massive drop in the BTCUSDSHORTS positions on Bitfinex leads to a run-up in the spot Bitcoin prices, adding that he will be watching markest for a similar bullish reaction. Throwing a closer look at the BTCUSD-BTCUSDSHORTS correlation showed an erratic positive correlation. The Bitfinex short positions went for a Bear Run after December 2020, a period that coincided with a spike across Bitcoin spot and derivatives markets. In April-May, a run-down in Bitfinex short positions coincided with the Bitcoin price surging from sub-$45,000 to a record high of $65,000. Nonetheless, similar BTCUSDSHORTS crashes in June—at best—kept Bitcoin stabilized above a psychological support level of $30,000, if not pumped it outright.
Downside pressure on Bitcoin sustains despite a recent drop in BTCUSDShorts also as Grayscale Investments unlock 16,000 BTC worth of its Grayscale Bitcoin Trust (GBTC) shares on July 18, after a six-month lock-up period.
Bitcoin price set to rebound? BTC shorts on Bitfinex crash by 25% after record spikes, CoinTelegraph, Jul 19