Bets On Bitcoin Price Decline Hit 6-Week High

Published on by Coindesk | Published on

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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.