The pessimistic sentiment round bitcoin costs noticed the variety of shorts hit a six-week excessive on Thursday.
The BTC/USD quick positions on the cryptocurrency trade Bitfinex jumped to 37,891 – the very best stage since Oct. 15 – and have been final seen at 36,996. Notably, shorts have risen by 95 p.c within the final three weeks, accompanying BTC’s current drop to 14-month lows close to $3,500.
Extra importantly, the quick positions remained elevated above 35,000 throughout BTC’s oversold bounce from $3,500 to $4,400 and climbed to contemporary multi-week highs on Thursday. Additional, the long-short ratio of 0.73 is biased towards the bears.
BTC/USD shorts on Bitfinex
The info signifies that, regardless of being so deep into the bear market, sellers look like displaying no indicators of exhaustion. Consequently, the cryptocurrency could revisit the current low of $3,474 as hinted within the technical charts.
The bearish sentiment, nonetheless, may quickly attain extremes because the quick positions are down simply 7 p.c from the document excessive of 40,289 that was reached on on Sept. 19. Furthermore, the intense bearish positioning is extensively thought of an indication that the sell-off is overdone and infrequently presages a development reversal.
Due to this fact, the prospects of sudden bullish reversal, just like the one seen on April 12, would enhance considerably as soon as the quick positions attain document highs.
Disclosure: The writer holds no cryptocurrency property on the time of writing.
Market app picture through Shutterstock; Price charts by Buying and selling View