Bitcoin Shorts Reach ATH, is a Short Squeeze Incoming?

Bitcoin shorts reached all-time highs on BitMex and other exchanges which offer derivatives.

While Bitcoin could only be bought and sold in its initial days, the advent of futures trading, perpetual swaps, short positions, and leverage trading have mirrored most financial products seen in traditional markets.

As more institutional traders move towards trading cryptocurrencies and amateur Bitcoin enthusiasts pick up tricks from the traders' handbook, the business of shorting a digital token has led to profits, regardless of the direction of price movements.

Keeping the aforementioned points in mind, we may wonder if all short cryptocurrency traders are making money.

In terms of today, short positions for Bitcoin have reached an all-time-high on Bitfinex, the world's fifteenth largest cryptocurrency exchange as per data from CoinMarketCap.

"A short squeeze is a situation in which a heavily shorted stock or commodity moves sharply higher, forcing more short sellers to close out their short positions and adding to the upward pressure on the stock."

Is this a terminal error? No. That's just the market reacting in an opposite direction to Bitcoin shorts on Bitfinex.

Basically, with the sheer number of over-leveraged shorts trading the market, a whale, or a pod of whales, can quickly move prices up and leverage their positions to make significant profits.

Buying pressure is absent when shorts are at an all-time high, making the market ripe for a quick price slap followed by an actual short.

The market looks alluring for a short squeeze taking place sooner rather than later.