We are seeing a drop in BTC positions in overall markets. This is reflected in my portfolio as I am currently over 96% in stable coins. The word for this is "Flat".
We are still in an overall down trend, although I think that trend is slowing down. Eventually, the downtrend should reverse and I will change my general bearish sentiment. During an overall down trend, I am in USD or stable coins and I look for small, smart wins to pay the bills until the market seems more neutral over the longer term.
We are also seeing a lack-luster replenishment of positions on Bitfinex, which I believe is a decent barometer for the more crypto-centric trader. As per the chart below, we had a large dip in positions after this most recent run to 3700 (USDT Binance price). The longs are replenishing, which tells me there is some more liquidity for those who want to take advantage of the stop losses by smashing down the market. They may be waiting for more 100x and 50x traders to enter some longs before they slam it down. IF they slam it down. They may also have a quick, small run upwards, but this is also a gamble as many who see 3000 range as the bottom begin to FOMO and their plans to short would become much more expensive. The Bitfinex longs/shorts position ratio is now 56%43%, which is notable, but not extreme. As I am more contrarian during the current market landscape, I would be cautions with going long. A chart further down this report will show other reasons why I see at least a small drop coming. Below, the Bitfinex longs/shorts is graphically represented on a chart:
Chart-wise, we are seeing some history where the current formation indicates a Bart downwards (Google "Bart Head" or "Momentum Ignition Algorithm" for more on "barting"). This could stop around the most recent consolidation around 3400 (USDT Binance price) and gather some steam before heading up, OR gather some longs with stops before it gets slammed down. Being as I am already in stable coins, I am keeping alt positions to a minimum and taking profits whenever I can. The chart below shows how a rejection at the top of a MIA bart is a good signal for a fall. Also the slope of the Bart is slowly falling, degrading all positions slowly. While the longs are building, I don't see this as the smartest position for me to take based on chart history as well as the information above.
As to Bitgur open interest, we are seeing the smaller traders more bullish while the larger traders are bearish. This is indication (in my opinion) that we could see a run in the short term and a fall in the mid term with a heavier weight on the mid term fall.
Lastly, IG Client sentiment reflects the flattening of the space with an overall net long retail position. Their data on overall retail space says:
"Bitcoin: Retail trader data shows 61.9% of traders are net-long with the ratio of traders long to short at 1.63 to 1. The number of traders net-long is 77.9% lower than yesterday and 78.6% lower from last week, while the number of traders net-short is 49.2% lower than yesterday and 60.0% lower from last week." dailyfx.com/sentiment
Conclusion:
To me, this means that there will be a small or moderate move to create liquidity in either direction (or both). A slower move upward would probably build steam for the bulls which could mean that the MM (market makers) may short to tap the liquidity pool comprised of the stop losses. There might be a small move down to create a "higher low" around 3400 and build a floor for future use as well as a long sentiment and then some moves upward to restart the market. Our run up end of last week may have been the beginning of priming the pump for money velocity. The Market Makers need money velocity to make their entries and exits, so they will need to move the market to build greed and fear. This can be expensive, when things are in an unpredictable space, so they will probably make a few small moves and test the waters before pumping or dumping. With a drop in shorts, there isn't as much liquidity on the upside (no short stop losses to trigger), so we likely won't see a hard move up until this changes.
***Any information represented here is my opinion only and not intended to be used for financial gain. None of the information posted here is to be considered financial advice. Information posted here is strictly for entertainment purposes only. Please consult your financial professional before making any kind of investment. Investments can be very risky and any investor should educate themselves before investing by enlisting the help of a licensed financial professional. Past results are not indicative of future results in any construable way.***