Bitcoin (BTC) Short Bets Spike

Bitcoin (BTC) Short Bets Spike

Bitcoin (BTC) Short Bets Spike

$BTCUSD

  • The pessimistic sentiment around Bitcoin (BTC) prices saw the number of shorts spike to a 6-week high Thursday.
  • Bitcoin is on track to post its biggest annual price drop on record. That would change only if prices rise above $5,959.
  • The symmetrical triangle breakdown favors a drop to $3,474. Acceptance below that mark would further strengthen the Bears hold and open the Southside to the psych support at $3,000.
  • A short-term Bullish reversal would be confirmed only above $4,400.

The BTCUSD short positions on the cryptocurrency exchange Bitfinex jumped to 37,891 the highest mark since 15 October, and were last seen at 36,996. Notably, shorts have risen by 95% in the last 3 weeks, accompanying BTC’s recent drop to 14-month lows near $3,500.

The Short positions remained elevated above 35,000 during BTC’s oversold bounce from $3,500 to $4,400 and climbed to fresh multi-week highs Thursday.

Further, the long-short ratio of 0.73 is biased toward the Bears.

BTC/USD Shorts on Bitfinex

The data indicates that, despite being so deep into the Mr. Bear’s territory, sellers appear to be showing no signs of exhaustion in here.

As a result, the cryptocurrency is currently trading a low at $3,406.75 Friday, the market is open.

The overall Bearish sentiment could soon reach extremes, as the short positions are down just 7% from the record high of 40,289 that was reached on on 19 September. Moreover, the extreme Bearish positioning is widely considered a sign that the sell-off is overdone and often preceeds a Key trend reversal.

Therefore, the prospects of sudden Bullish reversal, similar to the 1 seen on 12 April 2018, would improve substantially once the short positions reach record highs.

With the bears still keeping the upper hand, a significant recovery from current levels appears unlikely before year’s end, and BTC looks set to snap its 3-year winning streak with a 74% annual price drop, its biggest on record.

BTC’s only previous annual loss was a 57% dive in Y 2014. This year’s loss would be the biggest on record as long as prices hold below $5,959.

Meanwhile, the technical charts indicate that the Bitcoin may extend the loss further before the year’s end.

Have a terrific weekend

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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