Bitcoin traders are avoiding substantial short positions, anticipating further price appreciation, analysts say
Bitcoin whales are less inclined to take out substantial short positions in anticipation of more price appreciation, some analysts argue.The price of bitcoin has increased by more than 21% since the beginning of the year, according to The Block’s Price Page.
At the beginning of January, bitcoin's price hovered around the $42,000 mark, but in February, it exceeded $52,000 for the first time in 27 months. This rapid surge in price would usually trigger a significant short-squeeze. However, this week's Bitfinex Alpha report said, "the magnitude of the short-squeeze observed so far this year has been small compared to the previous year."
"Large whale investors have not been taking substantial short positions, given their expectation that prices will continue to rise," Bitfinex analysts added.
Bitcoin short-squeeze ratio is lower than in recent years. Image: Bitfinex/ CryptoQuant.
Metrics signaling bitcoin bull market conditions
The Bitfinex Alpha report defined current market conditions as consisting of tightening supply and increasing demand.
The report illustrated how the current bitcoin-holder dynamics that could indicate early bull-market conditions. Citing Glassnode data, the analysts said that the total volume of bitcoin long-term holder supply in loss converges towards zero as the digital asset's price increases. "Currently, less than 6% of the aggregate long-term holder supply by individual entities are held at a loss. Historically, similar instances where the long-term holder cohort held a comparable volume of bitcoin in loss have been indicative of early bull market conditions," the Bitfinex Alpha report added.
The largest digital asset by market capitalization was changing hands for $52,219 at 8:04 a.m. ET, according to The Block's Price Page . The GM 30 Index , representing a selection of the top 30 cryptocurrencies, slipped 0.09% to 114.14 in the past 24 hours.
The price of bitcoin has held above the $52,000 mark. Image: The Block.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Morning News | Strategy has accumulated over 200,000 bitcoins so far this year; US SEC Chairman says US financial markets may move on-chain within two years
A summary of major market events on December 7th.

Crypto ETF Weekly Report | Last week, US Bitcoin spot ETFs saw a net outflow of $87.7 million; US Ethereum spot ETFs saw a net outflow of $65.4 million
UAE-based Mashreq Capital has included bitcoin ETFs in its new multi-asset fund.

Weekly News Preview | Federal Reserve Announces Interest Rate Decision; Stable Mainnet Launch
This week's top news highlights from December 8 to December 14.

Wang Yongli: Why did China resolutely halt stablecoins?
China is accelerating the development of the digital yuan, and its policy stance to resolutely curb virtual currencies, including stablecoins, has become fully clear. This approach is based on a comprehensive consideration of factors such as China’s global leadership in mobile payments and the digital yuan, the sovereignty and security of the renminbi, and the stability of the monetary and financial system.

Trending news
MoreMorning News | Strategy has accumulated over 200,000 bitcoins so far this year; US SEC Chairman says US financial markets may move on-chain within two years
Crypto ETF Weekly Report | Last week, US Bitcoin spot ETFs saw a net outflow of $87.7 million; US Ethereum spot ETFs saw a net outflow of $65.4 million
