The pessimistic sentiment around bitcoin prices saw the number of shorts hit a six-week high on Thursday.
The BTC/USD short positions on the cryptocurrency exchange Bitfinex jumped to 37,891 - the highest level since Oct. 15 - and were last seen at 36,996.
Notably, shorts have risen by 95 percent in the last three weeks, accompanying BTC's recent drop to 14-month lows near $3,500.
The short positions remained elevated above 35,000 during BTC's oversold bounce from $3,500 to $4,400 and climbed to fresh multi-week highs on Thursday.
Further, the long-short ratio of 0.73 is biased toward the bears.
The bearish sentiment could soon reach extremes as the short positions are down just 7 percent from the record high of 40,289 that was reached on on Sept. 19.
The extreme bearish positioning is widely considered a sign that the sell-off is overdone and often presages a trend reversal.
The prospects of sudden bullish reversal, similar to the one seen on April 12, would improve substantially once the short positions reach record highs.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Market app image via Shutterstock; Price charts by Trading View.
Bets On Bitcoin Price Decline Hit 6-Week High
Published on Dec 6, 2018
by Coindesk | Published on Coinage
Mentioned in this article
Dutch Central Bank to Bring Crypto-Business Under Licensing Regime to Curb Malicious Use
In order to curb the use of cryptocurrencies for malicious activities such as money laundering and the funding of terrorism, the central bank of Netherlands, De Nederlandsche Bank, has decided that it would be issuing licenses to cryptocurrency service providers.
One Month Later, Which Crypto Is Winning the Bitcoin Cash Split?
One month has officially passed since the bitcoin cash blockchain underwent a hard fork on November 15, resulting in the creation of two distinct networks.
Cryptojacking Overtakes Ransomware as Top Malware in Some Countries
Cryptojacking, the unauthorized use of another's hardware to mine cryptocurrency, has become the biggest cyber threat in many parts of the world, Bloomberg reported Dec. 14.According to research from cyber security research firm Kaspersky Lab, cryptojacking overtook ransomware as the biggest cybersecurity threat particularly in the Middle East, Turkey, and Africa.
Crypto is for Activists: Why We Need More Cypherpunks, Not Cypherposers
Bitcoin is activism, not a get rich quick scheme or a startup platform.