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Editorial policy rejection that focuses on precision, relevance and impartiality
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After a start full of events of the week marked by a strong swing below $ 100,000, the Bitcoin price recovered in an excellent way, returning above the sign of $ 107,000 to close the week. Despite the recent recovery of Bitcoin, there seems to be a different feeling on the market which, interesting, has grown over time. Here is how the current growing feeling could influence the future trajectory of the main cryptocurrency.
Short positions increase in the last 7 days – what it means
In a post dated 28 June on the Social Media X platform, the Analysis Analysis Analysis company shared an interesting chain development in the Bitcoin market.
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This chain observation is based on the indicator of the liquidity area (7 days), which measures three important data: on the one hand, it is used to monitor the movement of Bitcoin prices; on another, the net delta of open interest or positions; And finally, it shows the distribution of an open interest at various price levels.
For a small context, the net delta of open interest measures the difference between long and short open positions on the market. If the net delta reads positive, it means that buyers populate the market more. On the other hand, a negative reading means that there are more short open positions than long.
In the X post, Alphras stressed that, over seven days, more The positions were opened in a bet against the price of BTC. From the following graph, the red bars represent a negative net delta. As it has been previously explained, what it means is that short traders currently dominate the market.
It is interesting to note that the market dominated by shorts does not guarantee exactly that we will experience a sell-off in the near future. This is because the high negative delta is recorded at a time when the Bitcoin price is still at a stable level, even with little growth.
When the sales positions are opened in a stable but bullish market, this usually indicates that bears could be trapped. If, in the end, the price of Bitcoin exceeds the sale resistance, a phenomenon known as a short narrow phenomenon will occur.
In this scenario, the sellers will be forced to regain higher prices, thus pushing the price of Bitcoin up. This momentum will further liquidate the short positions.
What is the future for Bitcoin?
There are uncertainties that the Bitcoin market can break the sales resistance or go to the sellers. For this reason, Alphrattal warns that those with a bearish feeling should be cautious about their next move.
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At the time of writing this document, Bitcoin seems blocked in a range moved in the past and is currently evaluated at $ 107.309. The miserable growth of the top cryptocurrency of 0.2% in the last 24 hours pales compared to its seven days of 5.2%.
First floor image from Istock, TradingView chart