• Bitcoin unhedged shorts are currently at one-year lows.
• During the Luna and FTX collapse, unhedged shorts went parabolic due to the bearish sentiment in the crypto ecosystem.
• Unhedged shorts remain at historical lows, indicating investors don’t want to bet against Bitcoin now due to its 70% year-to-date return.
Overview of Bitcoin Unhedged Shorts
The recent analysis on Bitfinex whale movement cashing out 12,000 Bitcoin has brought attention to hedging and unhedging strategies in relation to cryptocurrency trading. It appears that unhedged shorts have dropped significantly over the past year and remain at historically low levels despite recent market volatility. This indicates that investors may be reluctant to bet against Bitcoin due to its impressive 70% year-to-date returns.
Luna and FTX Collapse
The collapse of Luna and FTX brought about a period of extreme bearish sentiment in the crypto ecosystem which was reflected in an exponential increase in unhedged short positions. Despite this temporary spike, overall unhedged short positions remain at historic lows suggesting investors see limited downside risk for Bitcoin’s price movements going forward.
Bitcoin’s performance over the past year has been impressive with a 70% return so far this year alone. This strong performance appears to have made investors more cautious when it comes to betting against bitcoin as evidenced by the current low volume of unhedged short positions being taken out.
It is difficult to predict how investor sentiment towards bitcoin will evolve going forward but for now it appears that those looking for opportunities on the short side will have limited success as unhedged shorts remain near all time lows despite recent market volatility events such as the collapse of Luna and FTX .
The data suggests that investors are not willing to bet against Bitcoin right now as they view its potential upside far outweighing any potential downside risk associated with investing in cryptocurrency markets. Therefore, it remains unclear what impact volatile market movements such as those seen recently will have on investor sentiment going forward but for now it appears that those looking for opportunities on the short side will face an uphill battle with little chance of success given current market conditions.