Bitcoin Shorts Skyrocket On Multiple Exchanges, Caution Ahead?

Although the Bitcoin price attempted a breakout above $60,000 levels on Sunday, it faced a strong rejection with the immediate surge in the Bitcoin short positions. Currently, the BTC price is trading 1.7% down at $58,515 with a market cap of $1.115 trillion.

Bitcoin Short Positions on the Rise

As soon as the Bitcoin price rallied to $60,000, Bitcoin shorts became aggressive across multiple exchanges with the 24-hour short volumes surging 118% to more than $18.30 billion. HODL15Capital said that there was a major imbalance across different crypto exchanges including Deribit, Bitmex, Bitfinex, Kraken, and HTX.

Furthermore, the Twitter handle also suggested that heavily leveraged positions of 50x and 100x on crypto exchange Binance could soon face liquidation, hinting at a potential market shift.

My guess is all those 50x and 100x leveraged shorts on Binance will be wiped out soon 👇 We see you lads 🤷‍♂️ pic.twitter.com/MKuvUvGZJC

— HODL15Capital 🇺🇸 (@HODL15Capital) August 19, 2024

The broader liquidation data shows that more than $77 million have been liquidated in the last 24 hours across the entire crypto market. Of these, $50 million is in long liquidation while $26 million is in short liquidation. Ethereum has contributed to the most liquidations at $19.5 million.

ETF Flows Fail to Ignite Bullish Sentiment

The total flows into the spot Bitcoin ETFs and the spot Ethereum ETFs have been subdued over the past two weeks. Last week, the BTC ETFs had a net flow of just $32.5 million with the Grayscale Bitcoin ETF GBTC seeing $195 million in total outflows. On the other hand, Fidelity’s FBTC recorded the most inflows at $82.3 million, and BlackRock’s IBIT recorded net inflows at $71.07 million.

Similarly, the spot Ethereum ETFs saw net outflows at $1.416 million last week. BlackRock’s ETHA saw net inflows of $76.35 million while Fidelity’s FETH saw a net inflow of $25.79 million. At the same time, Grayscale’s ETHE saw net outflows of $118 million. Some market analysts also predict that Ethereum ETF could snatch 50% of inflows coming to Bitcoin ETF.

All eyes will be on the FOMC meeting ahead this week as well as the comments coming from Fed Chair Jerome Powell. Also, the Jackson Hole annual meeting among the US banks will be on the radar. It will interesting to see how the BTC price reacts to the macro developments.