Although Bitcoin has broken the record high in 2021, traders are wary of short crypto assets. Data from Bitfinex shows that the number of short contracts is very low compared to the total number of shorts in mid-March 2020. On Saturday, January 2, 2021, the price of Bitcoin exceeded $33,000 and short positions exceeded $100 million. The position can be closed within a few minutes.
During the afternoon trading session (EST) on Saturday, Bitcoin (BTC) reached $33,333 per unit. In the 12 years of existence of encrypted assets, the price is the highest price in a lifetime in terms of legal value. Since March 12, 2020, the value of Bitcoin has also risen sharply, also known as “Black Thursday.” Since that day, the price of BTC has risen by more than 777%, surpassing almost all other crypto assets.
Since the price of Bitcoin has risen sharply, traders have been reluctant to short the crypto asset since mid-March. For example, on the trading exchange Bitfinex, the number of short contracts has fallen by 77% since mid-March 2020. This action can be seen in countless other cryptocurrency exchanges, including Bitmex, Bybit and other platforms that provide margin and leverage trading. The overall short contract has dropped significantly.
Although the activity of shorting contracts on Bitfinex has decreased, the number of longs has not increased much. In fact, since April 2020, the number of long contracts hosted on the platform has also plummeted. Short and long positions remain at a low level, which shows that traders are not sure how to place bets based on future bitcoin prices.
At the same time, traders who are willing to short Bitcoin (BTC) in this impressive bull market have lost their shirts many times during the rise. An example is when BTC broke through a record high of $20,000 two weeks ago, about 74,000 short positions were liquidated that day. At the time, the clearing data of the derivatives exchange Bybit explained that it saw up to $1 billion in clearing, and about 98% of the transactions were short.
There is no change in today’s price increase above the $33k level. According to data from Bybit on Saturday, 78,107 traders were liquidated. The largest clearing order occurred on Bitmex-BTC this morning (EST), valued at approximately $10 million. In the last 24 hours of crypto trading, more than $800 million in contracts were liquidated.
The popular Twitter account is called “Rekt” and recorded a settlement worth $100 million with a unit price of $30,864. “XBTUSD short-term short position: buy 10,000,000 at a price of 30,864,” Rekt Tweet. He added: “I was shocked to discover that gambling was taking place here.”
What do you think of the low activity of Bitcoin short positions and the liquidation after Bitcoin’s all-time high? Let us know your thoughts on this topic in the comments section below.
Picture Credits: Shutterstock, PNG, Wiki Commons, Bybit data, Twitter,
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