Bullish Sentiment for Bitcoin Is at a 5-Month Higher

The ratio of lengthy-to-quick positions positioned on bitcoin (BTC) has achieved its best level in around five months on cryptocurrency exchange Bitfinex.

At push time, the BTC lengthy positions positioned on the exchange complete 33,750 units, value $137.3 million at present-day industry costs, while the variety of quick positions is about 11,000 units a lot less at just 22,787 – now value just below $93 million.

This results in the lengthy-to-quick ratio of nearly 1.5:1 – its best due to the fact August 6th of previous year.

Bitcoin longs and shorts (Bitfinex)

The fall in quick positions is not precisely astonishing, looking at the rate of bitcoin fell about 50 p.c amongst Nov. 14 and Dec. 14, providing traders ample time to lock in earnings although awaiting even more chances.

A bullish technical reversal pattern recognised as the “inverse head and shoulders” pattern is also obvious on the bitcoin’s rate chart, which may be playing yet another aspect in scaring bears out of the industry for now.

Despite the fact that the lengthy/quick ratio being at multi-month highs may seem to be encouraging for bitcoin bulls, the industry will likely witness yet another sharp decline if important assist in close proximity to $3,200 is breached, as it would sign the most up-to-date corrective bounce to nearly $4,400 has ended.

This would put the industry at danger of enduring a “long squeeze” or speedy closure of lengthy positions, which could have a speedy and bearish impact on the rate of bitcoin due to the fact the only way to terminate a lengthy placement is to promote back the longed BTC.

Disclosure: The author retains BTC, AST, REQ, OMG, Fuel, 1st and AMP at the time of creating.

Bear and bull graphic by using Shutterstock Charts by using TradingView