This week was brutal for those betting the crypto market would continue to drop lower, as they were instead met with a surprise bull run leading to the most liquidations of short positions in over a year.
In the case of Bitcoin (BTC) which rose from $17,500 at this time last week, to over $21,000+ at the time of publishing, truly punished those who bet against it.
Short trader losses for BTC reached levels not seen since Aug 2021.
Total Lost by those Shorting the Crypto Market this Week Totals OVER $500 Million...
Ethereum has been the most shorted coin with 49% of liquidations coming from ETH shorts, Bitcoin was the second most popular coin responsible for 29% of the liquidations, with the remaining liquidations spread among altcoins that also went along for the ride up.
One thing is clear from looking at these stats - a lot of people were caught off guard!
The Question on Everyone's Mind - Where Do We Go From Here?
There's a split among analysts who predict that prices will continue to rise, and others who believe prices are soon heading back down... so, that doesn't help much.
Both sides have valid reasoning behind their predictions, it's up to you to decide which feels right.
Those who believe that bitcoin will continue to rise point to the fact that the cryptocurrency has bounced off lows of approximately $16,000 on five different occasions over the last three months. This is seen as proof that "we've found the bottom" - many investors were standing by, waiting to see what the bottom would be - now that they have an answer, expect more to take positions as prices remain low.
Others believe that these gains are only temporary. They point to the general economic uncertainty that can be found in most industries, in most countries - and top concern, inflation, far from resolved.
Make Smart Moves:
There's 2 strategies dominating in communities of experienced traders.
Those who agree$16,000 is indeed 'bottom' will likely agree with the strategy shared by one trader "Anything within $10k of that is an automatic buy - so if the price is $26,000 or less I'm accumulating."
If you're not convinced that we've seen the worst of it, you'll probably agree with what another trader shared, saying "I still believe a drop to $10-12k is possible before the next real, sustained bull run. So I'm going to keep my DCA strategy running" - DCA stands for Dollar Cost Averaging, this method involves investing a set amount each week no matter what the price is. If it goes down from here, you still have funds to buy the dip. If the price continues to go up, you at least bought some near the recent low.
Share your thoughts:
Do you believe recent gains will hold? Tweet us at @TheCryptoPress
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Author: Mark Pippen
London News Desk
Breaking Crypto News
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