10 Dec 2019 Josphat Kariuki
Bitcoin Long Vs. Short Positions Hit An All-Time High On Bitfinex
The crypto world saw an exciting week with dips and spikes from the world’s top cryptocurrency - Bitcoin. After the $300 drop from December 5th, the stance on Bitcoin was primarily bullish, reaching a weekly high of $7,666. The lack of trading volumes, however, lead to Bitcoin losing its gains and falling back to the $7,400 region.
Crypto traders showed their support for Bitcoin’s price moving upwards by placing 50% more long position call orders on BitFinex, pushing the total amount of BTC to an all-time high - 38,280 Bitcoins. An all-time low on short positions also supports the bullish stance, with no more than 6,000 shorts (bets on asset’s price falling) on BTC.
The situation may seem superb for crypto bulls, but crypto traders are aware of the signals associated with the bullish stance. Crypto expert UglyOldGoat raised his concerns about the difference between short and long positions, as, according to him, the total amount of both short and long positions in any given market is relatively balanced. The breakthrough can also mean Bitcoin is close to a long position squeeze - a situation in which long positions are being liquidated due to price falling down.
Indeed, BitFinex data shows five times more long position liquidation than short positions. The most probable reason, however, maybe the price correction for Bitcoin.
Pricewise, Bitcoin must secure a strong support zone above $7,350, as this is the point at which the 100-day and 50-day moving averages intersect. Looking a bit down, the most vital support zone above $7,000 is in the $7,080-$7,100 regions.
Josh Rager, a popular crypto trader, stated that the current price swings could not clearly distinguish bearish or bullish market for Bitcoin. Resistance levels are set rather low, as the first significant resistance is around $7,500. Another crucial resistance level is around the $7,800 mark.
Crypto expert Tone Vays, however, tweeted his predictions about Bitcoin’s price, stating that “there is a 60% chance we may see a dip below $6,500 before a major spike towards $10,000”.
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