Bitcoin’s price recently jumped over 12%, hitting a high of $95,600. But don’t let that fool you! Behind the scenes, something interesting is happening.
Short Sellers are Winning
Data from Glassnode shows a surprising trend: even with the price increase, a lot of traders are betting against Bitcoin. They’re placing “short” bets, hoping the price will drop.
This is shown in a few ways:
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High Open Interest: The total value of outstanding Bitcoin perpetual swap contracts is way up—a 15.6% increase since early March. This means more people are involved in these bets, increasing the potential for wild price swings.
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Negative Funding Rate:
The funding rate is negative (-0.023%). This means short sellers are actually paying long (buy) traders. This usually happens when there are more short bets than long bets, indicating a bearish sentiment.
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Falling Long-Side Premiums: The 7-day average of premiums paid to long traders has dropped significantly, further confirming the dominance of short positions.
A Potential Short Squeeze?
While it looks bearish, Glassnode points out a twist: all this short selling could lead to a “short squeeze.” If the price suddenly jumps, short sellers will rush to close their positions to avoid bigger losses, potentially pushing the price even higher.
Bitcoin’s Current State
Currently, Bitcoin is trading around $94,629. Despite the short-selling activity, the overall trend in the past month has been bullish, with gains of over 8%. Bitcoin remains the largest cryptocurrency by market cap.
