On-chain knowledge reveals that Bitcoin(BTC) is at present the third-most shorted cryptocurrency ever, whereas Ethereum(ETH) stands because the second-most shorted.
Analyzing the common funding price (in %) set by exchanges for perpetual futures contracts, it may be noticed above that lengthy positions periodically pay brief positions at any time when the speed share turns into optimistic. Alternatively, when the speed dips in direction of the damaging finish of the chart, brief positions may be seen to pay lengthy positions periodically.
Occasions marked a low within the BTC cycle may be noticed above in March 2020, Summer season 2021, June 2022, and November 2022.
In second place relating to shorting, ETH was probably solely shorted extra throughout the Merge occasion because of the ‘purchase the rumor, promote the information’ contagious mentality on the time.
Now we have seen the steepest dip towards damaging funding charges in current historical past by way of September. Regardless of the decline, the idea that shorting will drag a worth to zero usually snaps again – forcing patrons so as to add gasoline to the rally.
To substantiate this reversal for the occasions forward, it's anticipated that additional weeks of deep damaging funding might be required earlier than a snap-back occasion happens.
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