Bitcoin Market 78% Long, Above Recent Averages

Bitcoin Futures Back Above Key $10,000 Level
BTC shorts at lowest levels in 2-years over last month.
Shorts squeezed during the rally to 14k
Bitcoin Longs At Record Level

Bitcoin Longs At Record Level


OVERNIGHT CRYPTO MOVERS

Bitcoin U$10,512.00; +12.41% 
XRP  U$0.3173; +4.70%
Ethereum  U$219.70.; +5.24% 
EOS  U$4.0282; +7.03%
Litecoin U$97.81; +10.36% 
 Bitcoin SV U$137.90; +9.00%

CRYPTO STORY OF THE DAY

The Volatility Of The Last Month Has Drastically Changed Long / Short Dynamics In BTC/USD Markets - We Analyze A Potential Narrative

According to datamish, total BTC shorts have fallen abruptly to their lowest levels in at least 2-years over last month. This has also brought the percent longs vs shorts to their widest levels of all-time. The market is now 78% long, whereas over the last year those figures have been consistently in the 40 to 60% range. BTC has generally been a much more balanced market than other coins with ETH longs, for example, having held above 80% long since March. 

Key Cryptocurrency Takeaway: Our best guess for the drastic drop-in shorts is a combination of shorts getting squeezed during the rally to 14k followed by aggressive covering from those that did not get shaken out of positions on the pullback. The last time a similar decline in short positions occurred was during the volatility of Jan / Feb 2018 when the aggressive price action made it extremely dangerous to hold margin short positions. The new dynamic, while not proving to be an overly reliable indicator, does create inherent vulnerabilities for long holders. The low current demand for shorts leads to inexpensive margin prices which reduces the cost in executing 'long squeezes' and increases the likelihood of snap-pullbacks.

About the Author

FRNT Financial is an Institutional Brokerage which offers clients a variety of products along with research & analytics in the crypto-space.