Bitcoin Whales Resume Shorting Positions Amid Rising Positive Market

Bitcoin, the largest cryptocurrency asset has captured the attention of crypto enthusiasts as the coin is demonstrating bullish momentum to hit the $66,000 level. Despite this newfound upward strength, whale investors have resumed shorting BTC, triggering worries about a possible decline in price.

Are Bitcoin Whales Betting Against A Rally?

Alphractal, an advanced investment data analysis platform has pointed out a bearish trend among the whale investors of BTC in a recent research. The platform spotted the negative development after observing the Whale Position Sentiment metric for Bitcoin.

Specifically, the Bitcoin Whale Position Sentiment measure has witnessed a significant change, suggesting that whales have started shorting again as the cryptocurrency surpasses the $64,800 price level. Although the market is generally trending positively, this recent uptick in whale shorting activity is indicative of a more cautious approach, which could put short-term pressure on the price of Bitcoin.

Bitcoin whale position sentiment metric is a “powerful indicator” that follows the direction of positions leveraged by whales over several exchanges. A rise in this metric indicates increased long positions, whereas a decline suggests a spike in short positions.

Bitcoin Whale Position Sentiment metric shows rise in shorting activity | Source: Alphractal on X

With one of the strongest correlations between this metric and price action, it is evident that whales continually dominate and control the market. Whale position sentiment, which is derived from the largest trades made throughout the day or hour on all exchanges, combines this data with broader positions to provide a powerful sentiment oscillator.

Considering the development, the platform highlighted that Bitcoin needs to stay above the $62,200 level, which is the Short-Term Holder Realized Price, as a break below this level will cause the crypto asset to transition into bearish territory.

Biggest Liquidity Pool Remains Below $40,000

Alphractal also noted that in recent days, BTC traders have dominated short positions according to the data from aggregated liquidation levels across multiple exchanges. This domination from short positions has led to substantial liquidation pools above the current price.

Presently, a sizeable portion of the short positions have already been sold due to the price exceeding $65,000. Furthermore, the primary liquidation pool in the short term is now positioned at $57,000.

While the development has triggered significant liquidations, there are still positions in regions between $67,000 and $71,000 that have not been liquidated over the past 90 days. However, analyzing from a 1-year outlook, Alphractal identified that the largest liquidity pool is located below the $40,000 level.

Despite this rise in shorting positions, BTC is displaying a healthy price action, holding above $65,000 with an over 3% increase in the past day. In the larger view like the 1-week and 1-month time frames, the digital asset is maintaining an upward movement, rising by about 3.40% and 9.14% respectively.