ETH short positions have fallen to historical lows. Last week's rise was just a warm-up?

Bitfinex's data shows that ETH short positions have fallen by more than 75%, from about $320,000 in early February to today's $74,500, the lowest since Bitfinex opened its ETH contract in August 2017. Last December, with the massive sell-off in the cryptocurrency market, short positions reached an all-time high of $430,000. Compared with a few months ago, the market sentiment has changed a lot.

Short

Source: TradingView

The number of short positions is usually negatively correlated with the price of the underlying asset: when one begins to rise, the other begins to fall. As can be seen from the above chart, the ETH short positions on the exchange almost quadrupled between November and December due to the fall in the price of the entire digital currency market. In November last year, Bitfinex's short positions increased by about $150,000 in the ongoing BCH fork. Then, as ETH fell below the $100 mark, on December 6, short positions increased again.

Bitcoin is also a similar situation. The number of BTC short positions also fell to its lowest level since early August 2018. The BTC short position declined before the initial deadline for the VanEck-SolidX ETF application, but increased by more than 120% when the US Securities and Exchange Commission postponed its decision. After last week's "bitcoin boom", short positions fell again.

Btc-1

Source: TradingView

Bitfinex currently supports 3.3 times leverage. Since not all traders use this leverage cap, the data presented here may be an exaggerated reflection of market realities.

Despite this, the reduction in short positions means that more and more traders expect that prices of ETH and BTC will continue to rise in the short term. The leveraged trading market seems to tell us that last week's rise may just be a warm-up. However, it should be noted that market sentiment may change in an instant.

We will continue to update Blocking; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

News

Interpreting the Performance of 14 L1 Public Chains in Q1: Stacks Emerges as Dark Horse, Network Usage Rate Generally Decreases

After the running-in period, various public chains have entered the "internal competition" stage.

Market

Bitcoin Hits $45,500 as Bulls Continue to Dominate

Bitcoin's strong price performance persists as it faces a crucial challenge to reach $45,000.

Market

Bitcoin Price Takes a Tumble, Plunges Below $41,000 Is It Just a Bump in the Road or the Start of a Rollercoaster Ride?

Bitcoin Dips Below $41,000, Market Correction Hits Ethereum, XRP, and Cardano with 5% Decline

Market

Cardano Price Prediction: ADA Set for Spectacular Gains Post-Bitcoin Halving – Future Millionaire Maker?

Cardano gains 4% in 24 hours, reaching $0.383747 amidst a 2.5% marketwide increase.

Market

$100 Million Trading Volume Fuels Cardano's 3% Surge Is it the Beginning of a New Bull Market?

Fashionista Alert Cardano (ADA) on the Rise – Breaking Resistance Level May Indicate Bull Market, But Poor Fundamenta...

Bitcoin

Crypto Analyst's Prediction Bitcoin to $100,000, Cardano Declared Dead

In a recent statement, Tom Dunleavy, esteemed Partner and CIO at MV Capital, provided insightful reasoning behind his...