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The bearish sentiment around the bitcoin fell to the lows of three months before, while the short positions placed on the encrypted Bitfinex exchange fell to the lowest level since 5 August.
At approximately 11:00 UTC, the number of short positions dropped to 21,434, representing a 33 percent decline over the past eight days. In the same period, the long – or the positions that point to an increase in the price of bitcoin – have also seen a significant increase of 10%, whose current number (24.410) marks a maximum of three weeks.
In fact, the feeling here seems to shift in favor of the bulls. The bitcoin price has been bearish from a two-week historical interval of only $ 139 on October 29, but sellers have not been able to capitalize the bearish result further.
As a result, the price of bitcoin has increased by about 4% since then to return to the interval and deny the short-term technically bearish vision.
Furthermore, the bitcoin bulls have the seasonality of the market on their side. The fourth quarter of the fiscal year is traditionally bullish for bitcoin prices, particularly the month of November. Data reveals that bitcoin ended in November only a monthly percentage loss from 2010, in 2011.
Looking at the chart below, it is perhaps no coincidence that the courts started to drop more than 30 percent just one day before November.
Long, short and BTC / USD price
When a short or long trade becomes overcrowded, it tends to represent the conditions of the overbought or oversold market. For example, a brief squeeze or a rapid price increase occurs when an abundance of shorts are forced to cover to avoid a loss of trading.
The same can happen even for the long ones. If there is an abundance of long and the price starts to fall, such desires are likely to close their trade and, as a result, the price of the underlying asset will fall ever faster.
Although the BTC shorts have suffered a severe blow, an abundance of long has not yet accumulated. The data show that only 53% of the leverage positions on Bitfinex is long, which means that 47% is a short circuit.
The relatively even ratio shows that the longs are not yet an overwhelming favorite, but it is worth bearing in mind that the higher the percentage of longs, the more likely the bitcoin price is to experience a pullback in the short term due to the conditions overbought market. would create, as was witnessed at the beginning of September.
Revelation: The author retains BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.
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