Cryptocurrency insights firm Santiment has revealed that traders on BitMEX are increasing their short positions against BTC, which could be a “great sign for those waiting for markets to turn upward again,” as prices “tend to increase when crowd FUD begins to take hold.”
? #Bitmex traders are continuing to short #Bitcoin in large quantities, at the most #bearish ratio since April, 2020. This is a great sign for those waiting for markets to turn upward again. Prices tend to increase when crowd #FUD begins to take hold. https://t.co/yIlYdMpHPQ pic.twitter.com/AHyPXWsTfg
— Santiment (@santimentfeed) June 17, 2021
rates at negative levels over the last few weeks, hitting their lowest level in 14 months. The data implies that after each major funding rate drop, the price of BTC tends to move upward.
On Twitter, popular pseudonymous analyst Blockchain Backer noted that the last time BTC short sellers were as confident shorting the cryptocurrency as they are now was after a major sell-off, which then saw bitcoin surge to a new all-time high near $64,000.
After last month’s price plunge to a $30,000 low, short sellers have increased their positions once again, implying a short squeeze could be seen in the near future. Bitfinex data shows that short interest recently skyrocketed to levels that hadn’t been seen since 2019.
BTCUSDT Shorts data via TradingView
In a separate tweet, Santiment revealed BTC has been ranging around the $39,000 mark as crowd optimism has been slowly dwindling, which could be a “good indication of crowd fear opportunists can pounce on.” The firm elaborated replying to a user, saying a “great trading strategy” could be buying when the crowd is fearful and selling when it is euphoric.
Social sentiment data for XRP, Cardano’s ADA, Ethereum, and Polkadot (DOT) has started flashing a buy signal, Santiment data showed earlier this month. On social media, the firm noted cryptocurrency traders had started taking a bearish stance on these four altcoins, which means it could be time to “scoop up more assets.”
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