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The pessimistic sentiment on bitcoin prices saw Thursday the number of shorts hit by a six-week spike.
At the time of the press, the short positions of BTC / USD on the Bitfinex cryptocurrency exchange rose to 37,891, the highest level since October 15, and were last seen at 36,996. In particular, the shorts have increased by 95% in the last three weeks, accompanying the recent drop in BTCs at lows of 14 months close to $ 3,500.
More importantly, short positions remained high above 35,000 during the oversold rebound of BTC from $ 3,500 to $ 4,400 and rose to new highs over several weeks Thursday. Furthermore, the long-short ratio of 0.73 is polarized towards bears.
Short films BTC / USD on Bitfinex
The data indicate that despite being so deep in the bear market, sellers seem to show no signs of exhaustion. As a result, the cryptocurrency could revisit the recent minimum of $ 3,474 as suggested in the technical tables.
The bearish sentiment, however, could soon reach the extremes because short positions fell only 7 percent compared to the historical maximum of 40,289 which was reached on September 19th. Furthermore, extreme downside positioning is widely considered a signal that the sell-off is exaggerated and often presages a reversal of the trend.
Therefore, the prospects for a sudden upside down reversal, similar to that seen on April 12, would improve significantly once short positions reached historic highs.
Revelation: The author does not hold cryptocurrency assets at the time of writing.
Image of the market app through Shutterstock; Price charts of Trading View
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