Bitcoin Traders Eye Potential Short Squeeze

via QuoteInspector.com
Voyager
Voyager

Despite a massive sell-off across the altcoin market, Bitcoin (BTC) is currently up a little over 1% on the week. With many investors calling for further losses, some traders have pointed to the current Bitcoin futures market as an indicator of a possible upcoming short squeeze.

According to trading data from Bitfinex, one of the world’s largest crypto exchanges, the total BTC/USD short positions are approaching 12-month highs with more than 34,177 BTC traded short. Additionally, the ratio of shorts to longs currently sits at 1.4, which is the highest in more than 12 months.

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A similar set up occurred¬†last month when Bitcoin jumped more than $600, or about 10%, in only 20 minutes, serving as an¬†example of when the market is overly short. During that time, Bitcoin liquidity provider Cumberland noted in a statement that “roughly $180,000,000 [worth of short positions] were liquidated on BitMex during the 20+ minute period between BTC’s initial spike and when it topped off.”

The market is certainly in an interesting position right now, as many altcoins are trading in sustained downtrends while Bitcoin has been relatively flat. The next few days may see further price divergence between bitcoin and altcoin price action.

Bitcoin’s market dominance has spiked during the recent bear market and currently represents 56% of the AltDex 100 Index (ALT100), a benchmark index for large-cap cryptocurrencies and tokens.

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Similar: Co-Founder of Ethereum Expects New Highs for the Crypto Market

Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.

 
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