Bitcoin Price: Hedge Funds Heavily Shorting BTC, Will It Outshine GameStop Saga?

Coingapestaff
June 9, 2024 Updated July 18, 2025
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Highlights

  • Hedge funds are expecting the Bitcoin price to plunge by over $18,000 in value.
  • However, analysts are bullish on the BTC price trajectory, hinting at new highs.
  • The BTC price rise could lead to massive short liquidations, catalyzing a short squeeze.

On Friday, Bitcoin experienced a notable dip, plummeting to $68,450 before a modest recovery to just above $69,000. This movement in the Bitcoin price coincided with a significant shift in market sentiment. The shift was reflected in the latest Commitments of Traders (COT) report from the Commodities and Futures Trading Commission (CFTC).

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Hedge Funds Are Heavily Shorting Bitcoin

The report indicated that hedge funds are heavily shorting Bitcoin, placing substantial bets against the oldest crypto. Moreover, this surge in short positions reflects a bearish outlook among institutional investors. It suggests that many are expecting Bitcoin price to decline.

The financial news outlet Zerohedge highlighted this trend on X. They pointed out a “big jump and new record high in Bitcoin hedge fund net shorts” on Friday. Earlier, Zerohedge had accurately predicted that the latest COT update would reveal a substantial increase in short positions against Bitcoin.

Zerohedge’s comment that “when this snaps, it will make Volkswagen/GME look like amateur hour” alludes to the potential for a dramatic market reversal. In the world of trading, a high number of short positions can lead to a situation where a sudden price increase forces short sellers to cover their positions via buybacks.

This move driving prices up even further—a phenomenon known as a short squeeze. The comparison to Volkswagen and GameStop underscores the potential for significant market upheaval. In 2008, Volkswagen briefly became the world’s most valuable company due to a short squeeze that caught many investors off guard.

Similarly, GameStop’s stock price surged in early 2021 as retail investors coordinated a buying spree, leading to massive losses for those holding short positions. For Bitcoin, analysts expect the implications of this hedge fund activity to be higher than GameStop or any other short squeeze stocks.

While short positions reflect a pessimistic view of Bitcoin’s near-term prospects, the volatile nature of cryptocurrency markets means that rapid and unexpected price movements can occur. If Bitcoin’s price were to rise sharply, those with short positions would incur substantial losses. It would potentially lead to a cascade of buying as they scramble to cover their shorts.

Also Read: Bitcoin Holders With 964K BTC Near Breakeven, Will BTC Price Dip To $67K?

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What’s Next For BTC Price?

Hedge Funds shorting Bitcoin expect a slump of $18,175 in the current BTC price. However, the technical indicators and analyst insights suggest a bullish outlook in both short and long-term. This indicates that Bitcoin could achieve a new peak sometime soon and if the prediction comes true, these shorts will be liquidated, leasing to an unprecedented rally.

However, Friday’s price action saw Bitcoin briefly dip below $69,000, triggering liquidations in long positions rather than shorts. Nevertheless, the market remains on edge, aware that a sudden upward spike in Bitcoin’s value could trigger a dramatic short squeeze. This would not only push prices higher but could also mirror or even surpass the market dynamics seen in past financial episodes like Volkswagen and GameStop.

At the time of writing, the BTC price was down by 0.06% to $69,382.34 on Sunday, June 9. Whilst, the crypto behemoth displayed a phenomenal market valuation of $1.36 trillion. Moreover, the 24-hour trade volume for Bitcoin plummeted 62.23% to $12.95 billion.

Also Read: 10 Top Cryptos Which Outperformed Bitcoin This Year

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.