Bitcoin Shorts At Record Low As The Asset Price Hits $67,000 ATH

Bitcoin

Bitcoin Shorts At Record Low As Asset Price Hits $67,000

  • Most investors are holding bitcoin as price surges
  • Market sentiments suggests that higher prices are expected
  • When everyone holds and do not sell, the market finds a way to reset

The coin market is on fire as the price of BTC soared above $67,000 on Tuesday, November 9, 2021. This is not unexpected since the market has been bullish for months.

Higher Prices Are Expected

There are several shorting opportunities in the coin market but what we are witnessing is that BTC shorts are at an all time low.

Data available from exchanges such as BitMEX and market analysis platforms such as Tradingview all confirm that many investors are long on Bitcoin.

On November 7, the percentage of investors that are short on BTC is 1.46% while the percentage long on the digital currency is 98.54%.

This is not really surprising since the price of BTC has been on the upswing since May 2021. The record low BTC short reflects the sentiments of the market as many investors expect that the value of the asset will keep on soaring.

What will be the effect of low shorts on BTC? According to the view of many traders, when most investors do not sell a particular asset, it is an indication that reversal is imminent. It is obvious that if everyone is bullish on the asset, the market would find ways to reset and this may be the case of Bitcoin in the coming days.

A Twitter user, Crypto Bud wrote that the hunt for liquidity by market makers would be the catalyst that initiates the liquidation of 98% of the positions.

How To Short Bitcoin

There are several options available for shorting Bitcoin. Some of these are:

Contract for Differences (CFDs)

This enables investors to bet on the price of BTC and are settled based on the difference between the opening and closing prices of the asset. CFDs are flexible in terms of tenure.

Short Selling Bitcoin

This essentially has to do with holding the cryptocurrency and selling at a price that you’re comfortable with. Then wait for the value of the coin to fall below the price that you sold to buy again.

Prediction Market

An investor predicts the value that the coin would rise to or drop to within a certain period. Another investor in the prediction market such as Polymarket and Augur takes up the bet from there. If the prediction is accurate, the initiator wins but if it fails, the person that took it up wins.

Binary Options Trading

This enables a trader to execute a call or put options. The former is executed when the investor wants to be long on the asset while the put option is used to short the asset. This put option enables the trader to sell at the predetermined price even if the value of Bitcoin falls lower later on.

The options trading has the advantage of enabling traders to limit their losses to the price that they paid for the option. This is available in exchanges such as OKEx and Derbit.

Futures Market

Bitcoin futures have been around since 2017. They enable an investor to determine when to short Bitcoin and at what price that they want to sell at that time using a contract. To short BTC in a futures market, you have to bet that the price of the asset will drop in the future.

Margin Trading

Despite the risks associated with trading with borrowed money (margin), it is a good way to short Bitcoin by shorting when you have made gains in the trade. Many exchanges support margin trading.

There are many platforms that support the buying and selling of Bitcoin. Others can even give you options to earn long term through staking of cryptocurrencies and other services. You can check the investing platform and exchange where you can earn by staking your assets.

 

 

 

Author: Jofor Humani

Jofor is a crypto journalist with passion for investigative review of projects with the aim to determine the authenticity of their claims.