Bullish Sentiment for Bitcoin Is at a 5-Month High

- Advertisement -

The ratio of long-to-short positions placed on bitcoin (BTC) has reached its highest level in over five months on cryptocurrency exchange Bitfinex.

At press time, the BTC long positions placed on the exchange total 33,750 units, worth $137.3 million at current market prices, whereas the number of short positions is roughly 11,000 units less at just 22,787 – now worth just under $93 million.

This creates the long-to-short ratio of nearly 1.5:1 – its highest since August 6th of last year.

Bitcoin longs and shorts (Bitfinex)

Bullish Sentiment for Bitcoin Is at a 5-Month High

The drop in short positions is not exactly surprising, considering the price of bitcoin fell roughly 50 percent between Nov. 14 and Dec. 14, giving traders ample time to lock in profits while awaiting further opportunities.

- Advertisement -

A bullish technical reversal pattern known as the “inverse head and shoulders” pattern is also evident on the bitcoin’s price chart, which may be playing another factor in scaring bears out of the market for now.

Although the long/short ratio being at multi-month highs may seem encouraging for bitcoin bulls, the market will likely witness another sharp decline if key support near $3,200 is breached, as it would signal the latest corrective bounce to nearly $4,400 has ended.

This would put the market at risk of experiencing a “long squeeze” or rapid closure of long positions, which could have a rapid and bearish effect on the price of bitcoin since the only way to terminate a long position is to sell back the longed BTC.

- Advertisement -

Disclosure: The author holds BTC, AST, REQ, OMG, FUEL, 1st and AMP at the time of writing.

Bull image via Shutterstock; Charts via TradingView

Previous Articles:

- Advertisement -

Latest

Bitcoin Drops 10% From Highs Amid Quantum Computing Warnings

Bitcoin dropped nearly 10% from its record high, falling close to $103,000 after reaching $112,000 last week. BlackRock warned that advances in quantum computing could...

Czech Justice Minister Resigns Over $45M Bitcoin Donation Scandal

Czech Justice Minister Pavel Blazek resigned after controversy over accepting and selling Bitcoin from a convicted criminal.The Justice Ministry auctioned nearly 500 Bitcoin, raising...

Uniswap (UNI) Rebounds Above $6 After Brief Uptrend Breakdown

Uniswap's UNI token dropped below its key uptrend line following a failed hold above the $6.00 support level.High trading volumes accompanied the decline, including...

Michael Saylor Invites Joe Rogan to Discuss Bitcoin on Podcast

Michael Saylor has shown interest in discussing Bitcoin on The Joe Rogan Experience podcast.The idea has generated excitement in the Bitcoin community, with some...

Congress Debates Stablecoin Bill Amid Rising Bank and Crypto Tensions

U.S. lawmakers are moving forward with the Senate Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, with debates set to resume after...

Must Read

What Are Sniper Bots Used in Defi Trading?

You've heard about DeFi, but what about sniper bots? These high-speed trading tools are shaking up the crypto scene.But don't fret, you're not...