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After an eventful start to the week marked by a sharp downward swing below $100,000, the Bitcoin price has recovered excellently, returning above the $107,000 mark to close the week. In spite of Bitcoin’s recent recovery, there seems to be a different sentiment in the market which, interestingly, has been growing over time. Here’s how the current growing sentiment could affect the premier cryptocurrency’s future trajectory.
Short Positions Surge Over The Past 7 Days — What This Means
In a June 28th post on social media platform X, cryptocurrency analytics firm Alphractal shared an interesting on-chain development in the Bitcoin market.
This on-chain observation is based on the Liquidity Zone (7 Days) indicator, which measures three important data: on one hand, it is used to monitor the price movement of Bitcoin; on another, the Net Delta of open interest or positions; and, lastly, it shows the distribution of open interest at various price levels.
For a little context, the open interest Net Delta measures the difference between long and short open positions in the market. If the Net Delta reads positive, it means the buyers populate the market more. On the other hand, a negative reading means there are more short positions open than longs.
In the post on X, Alphractal pointed out that, over the span of seven days, more positions have been opened in a bet against the price of BTC. From the chart below, the red bars represent a negative Net Delta. As has been formerly explained, what this means is that the short traders currently dominate the market.
Interestingly, the shorts-dominated market does not exactly guarantee that we will experience a sell-off in the near future. This is because the high negative Net Delta was recorded at a time when Bitcoin’s price is still at a stable level, even with little growth.
When sell positions are opened in a stable but bullish market, this usually indicates that the bears might be getting trapped. If, eventually, the Bitcoin price overcomes the sell resistance, a phenomenon known as a short squeeze will occur.
In this scenario, sellers will be forced to buy back at higher prices, thereby pushing the Bitcoin price to the upside. This upward momentum will then further liquidate short positions.
What’s Next For Bitcoin?
There are uncertainties as to whether the Bitcoin market might break the sell resistance, or go in favour of the sellers. For this reason, Alphractal warns that those with bearish sentiment should be cautious about their next move.
As of this writing, Bitcoin seems stuck within a choppy range over the past day and is currently valued at $107,309. The flagship cryptocurrency’s measly growth of 0.2% in the past 24 hours pales in comparison to its seven-day rise of 5.2%.
Featured image from IStock, chart from TradingView
Opeyemi is a proficient writer and enthusiast in the exciting and unique cryptocurrency realm. While the digital asset industry was not his first choice, he has remained absolutely drawn since making a foray into the space over two years. Now, Opeyemi takes pride in creating unique pieces unraveling the complexities of blockchain technology and sharing insights on the latest trends in the world of cryptocurrencies.
Opeyemi savors his attraction to the crypto market, which explains why he spends the better parts of his day looking through different price charts. “Looking” is a rather simple way to describe analyzing and interpreting various price patterns and chart formations. However, it appears that is not Opeyemi’s favorite part – in fact, far from it.
Being able to connect what happens on a price chart to on-chain movements and blockchain activities is what keeps Opeyemi ticking. “This emphasizes the intricacies of blockchain technology and the cryptocurrency market,” he would say. Most importantly, Opeyemi thinks of any market insights as the gospel, while recognizing that he is only a messenger.
When he is not clicking away at his keyboard, Opeyemi is most definitely listening to music, playing games, reading a book, or scrolling through X. He likes to think he is not loyal to a particular genre of music, which can be true on many days. However, the fast-rising Afrobeats genre is a staple in Opeyemi’s Spotify Daily Mix.
Meanwhile, Opeyemi is a voracious reader who enjoys a wide category of books – ranging from science fiction, fantasy, and historical, to even romance. He believes that authors like George R. R. Martin and J. K.
Rowling are the greatest of all time when it comes to putting pen to paper. Opeyemi believes his reading of the Harry Potter series twice is proof of that.
Indeed, Opeyemi enjoys spending most of his time within the four walls of his home. However, he also sometimes finds solace in the company of his friends at a bar, a restaurant, or even on a stroll. In essence, Opeyemi’s ambivert (haha! been searching for an opportunity to use the word to describe myself) nature makes him a social chameleon who is able to quickly adapt to different settings.
Opeyemi recognizes the need to constantly develop oneself in order to stay afloat in a competitive and ever-evolving market like crypto. For this reason, he is always in learning mode, ready to pick up the slightest lesson from every situation. Opeyemi is efficient and likes to deliver all that is required of him in time – he believes that “whatever is worth doing at all is worth doing well.” Hence, you will always find him striving to be better.
Ultimately, Opeyemi is a good writer and an even better person who is trying to shed light on an exciting world phenomenon – cryptocurrency. He goes to bed every day with a smile of satisfaction on his face, knowing that he has done his bit of the holy assignment – spreading the crypto gospel to the rest of the world.
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