Traders Pile on Short Positions as Bitcoin Approaches All-Time High | Breaking Crypto News & Blockchain Updates

Traders Pile on Short Positions as Bitcoin Approaches All-Time High — Crypto traders are exhibiting bearish behavior despite bitcoinBTC$109,522.96trading above $110,000 and possibly taking aim at a new record high above ...

Crypto traders are exhibiting bearish behavior despite bitcoinBTC$109,522.96trading above $110,000 and possibly taking aim at a new record high above $112,000.

Data from Coinalyzeshows that during bitcoin's move this week from $106,000 to $110,000, the long/short ratio fell from 1.223 in favor of longs to 0.858 in favor of shorts.

Open interestalso rose from $32 billion to $35 billion during this period, indicating that significant capital is being pumped into shorting bitcoin.

Bitcoin has been trapped in a relatively tight range since early May, trading between $100,000 and $110,000 with three tests of each level of support and resistance.

Technical indicators like relative strength index(RSI)continue to paint a bearish image with several drives of bearish divergence, with RSI weakening on each test of $110,000.

The recent influx of short positions could well be lower timeframe traders capitalizing on the range, shorting resistance before reversing their trade at each test of $100,000.

This rang true on June 22 when the long/short ratio shot up to 1.68 as bitcoin momentarily slumped through $100,000 before bouncing.

There is a potential bull case with the increase in short positions: a short squeeze. This would occur if bitcoin begins to trigger liquidation points and stop losses above a record high, which would cause an impulse in buy pressure and continuation to the upside.

Oliver Knight is the co-leader of CoinDesk data tokens and data team. Before joining CoinDesk in 2022 Oliver spent three years as the chief reporter at Coin Rivet. He first started investing in bitcoin in 2013 and spent a period of his career working at a market making firm in the UK. He does not currently have any crypto holdings.

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