① Currently, the difference between Bitcoin net long positions held by institutions and net short positions held by hedge funds has reached a record high, doubling the pressure on short sellers; ② Analysts point out that as soon as the Bitcoin price returns to $71,000, short positions over $150 million will be liquidated; ③ large-scale shorting will cause the Bitcoin price to rise vertically, or even above $100,000.
Financial Services Association, March 28 (Editor: Malan) Bitcoin short sellers are feeling a lot of pressure. When the price rebounds above $70,000, some people speculate that the upward trend of Bitcoin will overtake the downward sentiment, which in turn will push the price of Bitcoin to break through $80,000.
Industry watcher Kobeissi Letter pointed out that Bitcoin bears are currently being squeezed, mainly because the difference between institutional long positions and hedge fund short positions has reached a record high. Among them, there were nearly 15,000 net short contracts for hedge funds, but the net long contracts for institutions reached nearly 20,000.
At the same time, it analyzed that the duration of the Bitcoin price decline is shortening, and the decline is limited. Over the past 7 days, Bitcoin hit a low of $61,244 on Wednesday and then peaked at $71,551 on Tuesday.
This situation is clearly more difficult for bears. According to CoinGlass calculations, as soon as the price of Bitcoin reaches $71,000 (currently around $70,500), short positions worth $156.18 million will be forced to go into liquidation; if the price climbs further to $75,000, $3.85 billion of short positions will face liquidation.
Pav Hundal, chief analyst at cryptocurrency exchange Swyftx, predicts that a massive shorting could push Bitcoin's price to an unprecedented all-time high.
He added that the price fluctuated more than expected, and if the market sees bears squeeze, the price of Bitcoin could rise straight to $80,000. One can even look forward to seeing the price of $100,000 at some point this year.
tug-of-war
Swan Bitcoin CEO Cory Klippsten said he enjoyed watching a bloody tug-of-war between long and short positions, but in the end, one side always lost. Currently, both camps are desperately trying to win over more capital in an attempt to defend their views.
Hundal, on the other hand, pointed out that this is not a classic battle between bears and bulls, but rather a game of risk. However, the long-term exposure of asset management companies to Bitcoin has reached a record high. He suggests that asset management companies go short and long at the same time to mitigate downside risks.
Klippsten also stressed that the increase in Bitcoin trading activity may be due to the halving event that arrived on April 21. Historically, this event was characterized by spawning a large amount of speculative activity. Traders bought rumors and sold news. This may cause the Bitcoin price to drop briefly
According to the news, a trader said this week that the London Stock Exchange will build a market for Bitcoin and Ether exchange notes in May, which injects new strength into the crypto market. Major asset management companies have also increased their holdings of Bitcoin as part of diversification of investments.
There are also analysts who are not pessimistic about the slowdown in Bitcoin ETF capital inflows. Bitfinex analysts say the slowdown in ETF net inflows is not cause for concern because the main outflows are from Grayscale funds. Traders abandoned the fund because of the high fees it charges, and some people also want to make a profit.
Editor/Somer