Bitcoin Traders Aggressively Shorting BTC on Deribit and Binance

Learn about the surge in shorting BTC by Bitcoin traders on Deribit and Binance exchanges, and how it could potentially impact Bitcoin prices. Stay updated with the latest trends in the cryptocurrency market.

Posted 8 months ago in Bitcoin

Bitcoin traders observing price movements on computers

Onchain analytics firm Santiment has observed a surge in Bitcoin traders aggressively shorting BTC on both Deribit and Binance exchanges. Santiment believes that this increase in short positions could potentially lead to liquidations, which in turn could raise Bitcoin prices. The firm predicts that there is an increasing likelihood of a rebound to $30,000 as traders continue to bet against Bitcoin's price.

Short squeezes, where many traders bet against a cryptocurrency asset but its price rises instead, have contributed to recent increases in Bitcoin's price. Santiment notes that since the spike in shorting began last week, Bitcoin has gained about 4%. The firm also states that this trend is expected to continue.

At the time of writing, BTC was down 1.70% in the last 24 hours, with a price of $26,766. The decline in cryptocurrency markets follows the recent Federal Reserve interest rate decision, which kept interest rates unchanged but left room for possible future increases. As a result, the S&P 500 dropped to four-week lows.

Crypto analyst Ali points out an intriguing trend that has influenced the price of BTC in recent months. He observes that whenever the relative strength index (RSI) on the 4-hour chart reaches 73.31, the price of BTC tends to retrace. Ali notes that this is happening again as BTC approaches a declining resistance trendline at $27,440. He suggests that a further downturn could potentially take BTC to $25,200 or lower, presenting a potential 'buy the dip' opportunity. Traders should also keep an eye out for a 4-hour candlestick close above $27,440, as this could signal the start of a bull run.

In addition, on-chain Bitcoin activity has reached levels not seen since April. The Bitcoin mempool, which has not cleared since mid-April, is experiencing a surge in blockspace demand. This increase in activity is unusual, as it is accompanied by cyclically low transfer volumes. The congestion in the mempool may be attributed to high transaction volume.

Last updated 9/21/2023, 10:27:06 AM


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