Bitcoin rally

Bitcoin’s huge rally has nuked $6B in shorts this year: S3 Partners

Short sellers have lost more than $6 billion trying to bet against crypto stocks in 2023.

Crypto industry short sellers have lost at least $6 billion trying to bet against publicly-traded crypto firms this year, due largely to Bitcoin’s (BTC) outsized rally since Jan. 1.

According to a Dec. 5 report from research firm S3 partners, traders who bet against publicly traded crypto firms such as Coinbase, MicroStrategy, and Marathon Digital are now nursing $6.05 billion in on-paper losses.

The bulk of the losses for short sellers have been concentrated in the last three months. After Bitcoin fell to a quarterly low of $25,133 on Sept. 11, short sellers increased their exposure to what they thought was an overbought sector.

Bitcoin’s huge rally has nuked $6B in shorts this year — S3 Partners

Short sellers have lost more than $6 billion trying to bet against crypto stocks in 2023.

Crypto industry short sellers have lost at least $6 billion trying to bet against publicly-traded crypto firms this year, due mainly to Bitcoin’s (BTC) outsized rally since Jan. 1.

According to a Dec. 5 report from research firm S3 Partners, traders who bet against publicly traded crypto firms such as Coinbase, MicroStrategy and Marathon Digital are now nursing $6.05 billion in on-paper losses.

The bulk of the losses for short sellers have come in the last three months. After Bitcoin fell to a quarterly low of $25,133 on Sept. 11, short sellers increased their exposure to what they thought was an overbought sector.

Bitcoin futures open interest on CME nears 2021 all-time high

The futures positioning on CME shows Bitcoin could still move higher from its current price, says IG Australia analyst Tony Sycamore.

Bitcoin (BTC) futures open interest has reached $5.2 billion on the global derivatives giant Chicago Mercantile Exchange (CME), $200 million shy of its late October 2021 all-time high.

Open interest in CME’s Bitcoin futures has grown from $3.63 billion to $5.20 billion over the last 30 days, to Coinglass data. The open interest surge has run parallel to Bitcoin’s 26% gain over the same time, with Bitcoin currently trading at just over $44,000.

From Oct. 1–21, 2021, open interest in CME’s Bitcoin futures surged from $1.46 billion to $5.45 billion.

Bitcoin price charges higher, but whales line up to sell BTC at $20K

Analysts claim “mega whales” will make it very difficult for BTC traders to flip $20,000 to support.

Bitcoin (BTC) staged a welcome comeback after the Sept. 28 Wall Street open as bulls faced off with whale-sized sellers.

*BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView*

Whales lie in wait at $20,000

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining over $1,000 on the day to see highs of $19,656 on Bitstamp.

The move characteristically copied an uptick for United States equities, with the S&P 500 and Nasdaq Composite Index up 1.5% and 2.2%, respectively.

Now, analysis warned that the area of around $20,000 was still flush with large-volume traders eager to continue profit-taking.

The BTC/USD chart on major exchange Binance “shows brown Mega Whales dumping into BTC support to minimize slippage,” analytics resource Material Indicators commented.

An accompanying snapshot confirmed the bulk of resistance lying in wait at just below the $20,000 boundary.

“Let’s see if $19.5k holds to set up another potential run at the R/S flip zone ~$20k,” Material Indicators added.

*BTC/USD order book data (Binance). Source: Material Indicators/ Twitter*

To the downside, meanwhile, analyst Maartunn, a contributor to on-chain analytics platform CryptoQuant, noted a large area of bid interest between $18,000 and $18,500.

This was worth around $65 million as of Sept. 28, potentially forming a cushion of support.

As Cointelegraph reported, the area below June’s $17,600 low is conversely devoid of bid support, opening up the potential for a cascade toward $12,000.

In terms of the strength of the current bounce, traders were skeptical, with popular Twitter account Cheds cautioning on exposure with “bulls starting to celebrate.”

At the time of writing, BTC/USD traded around the $19,500 mark.

Dollar slumps after latest two-decade high

On macro, the story of the day was the United Kingdom’s central bank returning to quantitative easing (QE) after financial turmoil hit its currency and bond market.

The Bank of England sparked an instant recovery for GBP/USD after the pair hit all-time lows.

The U.S. dollar, already coming off twenty-year highs, continued to give back gains.

The U.S. dollar index (DXY) looked set to return below 113 at the time of writing, down a full 1.5 points on the day.

“Looks like we’ll finish the week out strong for Bitcoin and Stocks as we head into Pumptober,” a hopeful IncomeSharks reacted.

*U.S. dollar index (DXY) 1-hour candle chart. Source: TradingView*

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.