Bitcoin (BTC) Heavily Shorted on BitMEX, Here’s Where This Might Lead

BTC

Santiment, an on-chain analytics company, claims that there are significant bets against the price of Bitcoin on BitMEX.

Santiment notes that the financing rate for Bitcoin on BitMEX, a major cryptocurrency derivatives market, is at its lowest level ever.

The last time there were significant bets against the price of BTC, it happened in mid-March, and the price of Bitcoin increased 31% as a result.

Analysts at Santiment claim that prices are more likely to increase when the general consensus is that they will decline. This is due to the fact that the scenario just mentioned usually raises the possibility of a short squeeze.

A “short squeeze” is a rally that happens as a result of traders covering their negative short bets. To put it another way, the substantial purchasing pressure effectively “squeezes” the short sellers off the market.

The price of Bitcoin (BTC) oscillated sideways at around $27,000 on Wednesday as investors anticipated the most recent U.S. inflation data. The top cryptocurrency at the time of writing, according to statistics from CoinMarketCap, was trading at $27,560, down 0.29% from the day before.

Investors will be watching the CPI announcement closely for clues about how the U.S. Federal Reserve will decide at its next policy meeting in June. This month, the Federal Funds rate increased by 25 basis points (bps), making it the highest in 16 years.

On-chain situation for BTC

On-chain analytics company IntoTheBlock recently examined the on-chain scenario for BTC in a tweet.

It mentions that until about $24,000, there hasn’t been any historical demand below the present price point. This may imply that if the price of Bitcoin continues to decline below present levels, there may not be substantial purchasing support.

However, there is more purchasing activity in the ranges up to 30K, which is consistent with on-chain evidence suggesting that long-term holders are not dumping at these prices.

In the event that the price returns to the upside rather than creating resistance on a move up, these points, according to IntoTheBlock experts, might signal extra buying pressure.

The proportion of Bitcoin owners who are now making money has declined over the past month and is now at 64.98%, which is the lowest level since March. The good news in this situation is that comparable declines in holders’ profits this year have been largely fleeting because of rising purchasing demand.

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