July 25, 2021

Analysis: BitMEX Traders Short BTC In Large Quantities– Good Buying Opportunity?

2 min read

Bitcoin traders utilizing the popular derivatives exchange BitMEX still appear substantially more bearish on the possession’s future price developments, on-chain data exposes.

At the exact same time, a prominent expert argued that the most violent stages of the current market crash are over, which could recommend great entry chances.

BitMEX BTC Traders Still Bearish

Bitcoin’s price went through a roller-coaster in the past month propelled by FUD and over-leveraged positions on derivatives exchanges. In spite of recovering to some level from the mid-May bottom at $30,000, the possession may not be out of the woods yet.

Although the leveraged positions are significantly less now as some traders may have found out a painful lesson, data from the cryptocurrency analytics tool Santiment reveals that users using BitMEX still picture adverse rate developments for BTC.

“BitMEX traders are continuing to short Bitcoin in big quantities, at the most bearish ratio given that April 2020.” – – reads the company’s Twitter post.

BitMEX Short Positions vs Bitcoin Price. Source: Santiment
BitMEX Short Positions vs Bitcoin Price. Source: Santiment However, the analytics company described that this might likewise be a “great indication for those awaiting markets to turn upward once again.” This is because “rate tends to increase when crowd FUD starts to take hold.”

Good Opportunity For Newbies?

The narrative that this could be undoubtedly an excellent opportunity for newer investors to sign up with the marketplace received support from the Chief Executive Officer of Pantera Capital, Dan Morehead.

In the monthly newsletter, the executive suggested that bitcoin is “currently trading 36% listed below its 11-year exponential pattern.” The property has invested just 20.3% of its history as far under this valuation, which might be a clear sign that it’s underestimated.

When BTC has been this low in previous examples, its cost has skyrocketed in a matter of months to brand-new highs. He also resolved some speculations that the excellent cost appreciation in the previous year has put BTC in a highly overvalued (bubble) state.

“The year-on-year return never went actually off-the-chart like in previous peaks. It’s currently trading at 281% year-on-year – – which appears totally possible offered the cash printing that has happened in that period.”