Bitcoin Nears ATH as Traders Double Down on Short Bets—Here’s Why They Might Regret It
Bitcoin’s knocking on the door of its all-time high again—and traders are piling into short positions like it’s 2021. But this isn’t your grandma’s FOMO rally. The market’s playing a dangerous game of chicken with liquidity, and someone’s about to get wrecked.
### The Short-Squeeze Trap
Leveraged bears are betting against BTC’s momentum, ignoring the one rule of crypto: ‘The market can stay irrational longer than you can stay solvent.’ Classic Wall Street hubris—just with more memes.
### Liquidity Tsunami Ahead
With institutional inflows hitting record levels and spot ETFs hoovering up supply, these shorts might be fuel for the next leg up. Nothing pumps a bull market like a cascade of liquidations—ask anyone who traded the 2020 cycle.
### The Cynic’s Take
Meanwhile, hedge funds are ‘hedging’ by shorting the very asset they claim to believe in. Because nothing says conviction like betting against your own thesis (while collecting management fees, naturally).
Bitcoin has been trapped in a relatively tight range since early May, trading between $100,000 and $110,000 with three tests of each level of support and resistance.
Technical indicators like relative strength index (RSI) continue to paint a bearish image with several drives of bearish divergence, with RSI weakening on each test of $110,000.
The recent influx of short positions could well be lower timeframe traders capitalizing on the range, shorting resistance before reversing their trade at each test of $100,000.
This rang true on June 22 when the long/short ratio shot up to 1.68 as bitcoin momentarily slumped through $100,000 before bouncing.
There is a potential bull case with the increase in short positions: a short squeeze. This WOULD occur if bitcoin begins to trigger liquidation points and stop losses above a record high, which would cause an impulse in buy pressure and continuation to the upside.
