Bitcoin Shorts Maintain a 3-Month Downward steep as price soars high

Bitcoin Shorts Maintain a 3-Month Downward steep as price soars high

As indicated by information from the crypto exchange Bitfinex, the number of short positions on bitcoin has reduced to levels last seen since early August. According to analysts, this is a reasonable sign that the sentiment around the premier digital currency is heading up in the positive direction. 

In the meantime, the number of long positions on the exchange has increased substantially, minifying the shorts by November 2. Prior to then, the bears had been the dominant position as seen in the accompanying chart.

Bitcoin short orders in red and bitcoin long orders in blue on Bitfinex

Bitcoin Shorts Maintain a 3-Month Downward steep as price soars high

Presently, the ratio of short to long positions on Bitcoin has dropped to 0.86, which shows a net long-inclination among Bitfinex traders, denoting a trend change for the market, which has been overwhelmingly short in recent months. 

According to data made available from Trading View, short-to-long proportion of 1 (red line on the diagram) demonstrates neutral economic situations, an equilibrium of sorts, where neither bears nor bulls are in the majority.

Bitcoin short-to-long ratio on Bitfinex: 

Bitcoin Shorts Maintain a 3-Month Downward steep as price soars high

It’s important to note that distorted economic situations where either long positions or the short moves toward becoming “overcrowded” will result in temporary reversals in the market.

This has been the situation we see occurring amid the various “short-squeezes” this year, prompting forcefully higher prices. Likewise, an abundance of long trades can make pullbacks turn out more sharply than they would otherwise be. 

At the present levels,the ratio is as yet solid and we are a long way from extraordinary levels. Rather, it is likely a response to prices moving incrementally higher subsequent to long periods of trading sideways.

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Author: Jofor Humani

Jofor is a crypto journalist with passion for investigative reviews.

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