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Bitcoin Shorts Drop 60% - Watch for Long Entries into BTC?

BITFINEX:BTCUSDSHORTS   BTCUSD Shorts
Interesting note, the number of short positions on Bitcoin has just dropped dramatically (60% at press time), this is undoubtedly going to be people who shorted Bitcoin during the run, closing their positions now that Bitcoin has dropped so sharply.

What this could potentially mean, near-term at least, is that these formerly short positioned traders could look to switch to long positions at this dip.

This most likely will not drive the next run up, but what this could mean is that the near-term low could be in, for now at least, and as the short positions begin to close they will need to buy back their positions, which could drive a near-term recovery.

I would not make any trades on this information, but it is interesting to note that a large number of short positions have just closed, leaving the door wide open for those same traders to switch to long positions.

Edit: Note that not long after June 30th (the last major dip in short positions) Bitcoin had a minor rally

Comments

funny thing is, I've also experienced price dropping after such a move and gradually the shorts start increasing again.. which suggests we are still in bear market?
+1 Reply
Profit_Link TulpenFieber
@TulpenFieber, Exactly, all we know for sure is that a large number of short traders thought now was a good time to take profits, whether they make that bet again or not is yet to be seen, my read is that we could see another dip, but the trend remains strong.
+1 Reply
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