Yesterday short positions in BTC (BTC) dropped by 40%, which is the annual minimum in Bitfinex. The decline is associated with a rapid sale by a major operator, which has led to a possible shrinkage or shrinkage.
Bitfinex, a Hong Kong-based exchange house, experienced a unique move at 4:40 pm (UTC) yesterday. The operator terminated its operations at the rate of 10 500 BTC (at that time US $ 84 million), when the price was quoted close to $ 8,300.
The number of short battlefields found in Bitfinex at 3:50 AM (UTC) is 27,200, suddenly fell to 16,350 a few minutes later, Long positions slightly increased to 25,521 vacant positions over the same period.
Similar circumstances occurred on April 8, 2018, when the shorts also saw a 20% reduction in Bitfinex as they rose for a long time. Despite the fall, Bitcoin's price was not affected, remaining relatively stable in the range of 7,800 USD – 8,000 USD.
Falling shorts is not always a good symptom
While such a sharp decline may be evidence of bullish sentiment, a very large number of long positions is not always the best indicator. When the number of a position (long or short) is low, while the number of the position is relatively high, the market tends to create compression of the main itemswhat is called in the financial markets, such as shrinking or shrinking.
In short, when long positions far exceed short positions (or vice versa) a downward movement will cause much more exaggerated and volatile action on the part of the priceAs this happens, traders who have long positions are forced to close their stores to avoid future liquidation, resulting in even more pressure on sales. This phenomenon is known asLong shrinkage".
Bitcoin, the leading market capitalization currency, has seen a 28% growth in the past seven days, with a resistance close to USD 8,000. Although there are bullish signals in different indicators, as reported by criptonoticias, price shrinking may be the healthiest for sustainable growth of battleships in the coming months.